While entrepreneurs often need to engage with venture capitalists and private equity firms to take their businesses to the next level, many will secretly tell you how they would have loved to have been free of the shackles of external funding. Several promoters I have met say the idea of bootstrapping—building businesses with their own money—is extremely appealing to them. But for various reasons, they need to seek funds from VCs and PEs and thus begins a never-ending tug-of-war between the two sides. Not all VC/PE-entrepreneur equations are tension-ridden though, and there are several instances where they have worked together cohesively and built very successful businesses. However, the freedom that bootstrapping accords makes it very attractive, at least in the initial stages when a venture is being built from ground up.
We thought it would be appropriate that this year’s Independence Day special issue of Forbes India should dwell deeper on the aspect of bootstrapping, and celebrate entrepreneurs who have dared to build large, successful businesses despite having stayed away from the lure of external equity. Celebrating such achievements is even more important at a time when raising funds from the outside seems to be cause enough for entrepreneurs to uncork the champagne. Significantly, PEs and VCs have now begun to tighten the screws on several such ventures as it becomes clear that cash burn must give way to some visibility on profits. For bootstrapped companies, the freedom which they have to build businesses their own way often leads to triumphs which many externally funded entities may find hard to achieve.
Read more: Forbes