It’s not uncommon for a tech specialist to advocate bootstrapping. But if that specialist is a VC investor from Silicon Valley, people tend to pay attention.
A roomful of tech enthusiasts certainly paid attention Thursday night in Halifax when Eric Bahn, of 500 Startups, outlined the ways to avoid giving up equity in their ventures. In private meetings and his speech at Start Grind Halifax, Bahn advised founders to look for ways to move their companies forward on the cheap rather than raising.
“I work at a venture capital firm but I hate venture capital,” he said. “Venture capital is almost like a cocaine addiction.”
Once you’re raising, he said, there’s just a fevered struggle to get to the next round, and then the next. Bahn can speak knowledgeably about bootstrapping. He started his own company on $32,000 and ended up selling it for millions.
He describes himself as having been a mediocre student who had a singular talent – doing standardized tests. He founded a blogging site called Beat The GMAT and turned it into the largest MBA applicant social network on the internet, serving 3 million people each year. He grew annual revenue to more than $1 million and eventually sold the company to Hobsons, Inc.
Precise Messaging Taught at Breakthru Bootcamp
Bahn is also the Co-Founder of Hustle Con Media, which promotes events and content to help non-technical entrepreneurs launch startups.
He told the entrepreneurs in Halifax that they have to try to bring in revenue at the earliest possible stage. Rather than raising money to produce a minimum viable product, or MVP, they should focus more on what he calls an MVD, or minimum viable design. By that, he means a conceptual product that clients will pay for before it’s actually produced. Getting the money in early proves the demand for the product and provides the cash to build it.
“You should bootstrap as long as you can,” he said. He added that the proper growth hacking or growth marketing can bring in money to even the youngest companies. “I’ve seen what can happen if the growth-marketing is done really well.”
The meeting of Startup Grind Halifax – which brings a range of speakers from around the world into the city -- marked a watershed for the organization. Oleg Yefymov, who founded the group and tirelessly grown it, has decided to hand the rains over to Dave Culligan, the President at behuman clothing co.