How to Gain a Competitive Edge as a New Business

In today’s blog post, I want to talk about VC-funded vs. bootstrapped companies and how to gain a competitive edge.

Any capital-efficient business has a competitive edge. Why? because it’s not dependent on an extra round of fundraising to survive.

Choosing to raise money through venture capital with the potential of chewing through all of the capital you raised in exchange for equity is very scary.

Sometimes, when your company is VC-backed, it can feel like you have an axe held over your head the whole time. You just don’t know for sure IF you are going to get that next round of funding OR whether it will be delayed. This leaves your company and employees in limbo and potentially at risk.

So, how should you try and gain a competitive edge as a new business?

They never said it was easy, but in my opinion, bootstrapping is the way to go. It may be challenging because you will have to live within your means, however, it gives you the advantage of being capital-efficient, giving you options to scale back or hunker down when others run out of cash really fast.

You may be thinking, how do I get started? Here are some tips:

1. Make sure you have a clear vision in mind as well as a way to execute it. You may not start off doing the things you love. Sometimes you have to build what you have to build in order to build what you want to build. That’s how you start making money that can contribute to your end goal.

2. Review your financial situation. Not everyone has thousands of dollars sitting around to start up a new company. Gather what you have and then also start pitching friends, family, and your network to see if they would like to invest.

3. Don’t spend too much upfront. Be resourceful. Start by using free tools to help you get started. Take advantage of free programs and online resources and save money on office space by working from home.

They say, “Starting is half the battle.” For many aspiring business owners, the fear of failure, uncertainty and the overwhelming amount of work ahead can be paralyzing. This is your sign to start telling people about your vision and get started.

Important Question to Ask Yourself this Week:

How can I apply a bootstrapping mindset to my business?