Gyaan Sutra On entrepreneurship and technology

Bootstrapping is pure genius. We all know that.

But today, Business Pundit_[1] points to a study which says that more capital makes startups more productive. He emphasizes that since you have collected more capital, it saves you from the problems of under-staffing, and good managers would still be cost-effective.

According to him, what goes against bootstrapping startups is that people run out of money or time, and the startup gets pushed aside.

I disagree strongly with this line of reasoning. The idea of generalizing a topic like that is really disturbing, because it tends to create a completely wrong idea.

Wheather getting funding works for you, or goes against you, is a very personal thing for every startup. It works for some, if the funding parter is good, and ready to stand with you for quite some time. Getting funding gives you a major cushion to change the mistakes that you have made on your first attempt.

Yet, on the other side, getting funding could also possibly lead to losing control over your own firm, and could cause problems like what happened with FilmLoop.

Moreover, there are some businesses where it is impossible to startup without a lot of money and there are others where it is quite possible to start with the little money that you have.

So basically, it depends from industry to industry, country to country and startup to startup. It would be wrong to say that getting more capital means that you make your startup more productive. If you are productive, you will be, no matter if you are getting funded or not.