Ask YC: Is your startup bootstrapped, funded, or both?
Would be interesting to see the diversity of startups and their funding situation given all the turmoil and doom/gloom postings recently.
Published in 2008, this chronicle by @shafqat details the mechanics of building a profitable, self-funded business without venture backing.
The community focused on B2B customer acquisition channels, cold email vs SEO distribution, and balancing full-time employment with side-project development.
Probably should make a distinction between "bootstrapped" and "self-funded" here. Technically, a bootstrapped startup is one that sells a nonexistent product to an early-adopter customer first, and then uses that money to fund development. Or one that starts as a consulting company and then gradually builds out a product based on client needs. Think of Sun, Allegro, 37signals, or FogCreek.
A self-funded company is one that relies on founder savings or wage income to fund initial development, and then finds a customer after they have a product. Think Del.icio.us or Flickr before their angel investments.
Anyway, my last startup (GameClay) was 100% self-funded. If I choose to do another startup instead of taking a job, it'll also be self-funded, but I'll probably focus on identifying paying customers and generating revenue earlier in the process, which would make it closer to a bootstrapped startup.
We're between self-funded and bootstrapped - we put up a small initial monetary investment for servers and whatnot, and evangelized the product as we built it.
That being said, we're working on some big grant opportunities right now (the economic turmoil actually works in our favor to some degree), so I suppose we'll be "funded" soon, though without giving up any equity.
Really, there are probably endless ways of mixing and matching these different methods.
My co-founder and I have cut taking a salary from our start-up, which is angel funded. We've both taken (surprisingly well paid) part-time jobs at a local university as mentors to a group of 60 business students on an enterprise module. It's like being back in the garage - recharges the entrepreneurial batteries, keeps the investors happy, and we're meeting future potential employees. HIghly recommended.
Neither. Tarsnap isn't profitable yet, so I can't really say that it's bootstrapped; but I don't have any external funding, either.
Rather than being bootstrapped or funded, tarsnap is a living-in-the-parents'-basement startup.
My startup (http://www.HubSpot.com ↗) started off self-funded but is now venture-funded ($17 million in two rounds of funding).
I'll start: I'm cofounder of NewsCred. We are 100% boostrapped so far with very negligible burn rate. About to close a small angel round.