Bootstrapped startups or companies who use their own earnings or existing cash flow to fund growth rather than relying on outside sources of capital are in a very different category than venture-backed startups. By asset class nature, bootstrap startups prioritize revenue to stay alive, while venture-backed startups prioritize growth to retain investors for future runway needs. Bootstrap companies follow less of an exponential growth curve, while venture capital backed companies should be an outlier.
Enter a downturn and both sides get a little more interesting. The built-in business discipline of startup startups can be particularly resilient to a recession as the overfunded companies announce layoffs. With venture becoming more interested in the stable foundations of the startup group, is it time for the bootstrapper to go big?