Bootstrap in Bangalore

Bootstrapping, by definition, means that you are not raising any funding. Apart from the traditional view of bootstrapping in point 6, I am lenient enough to include 5 more. I am planning a write up on cash flow management but thought lets just list all the sources of funds at our disposal right now

1. Savings – This is an obvious one. The only insight I have is that don’t use all of it. I think one should keep at least 3 months of running expense in a separate buffer which is not invested in risky instruments. I used the 3 month formula keeping the existing job conditions in the IT market in mind. I was pretty confident of landing a job in 1 month if started looking and simply multiplied that by a safety factor of 3. You will need to do the risk analysis yourself but I would say if you are keeping a buffer greater than 6 months, you are not taking enough risk.
2. Rich uncle – or Dad or Brother is definitely one of the good things that can happen to you. Not only do you get money but also advise which I hope is coming from their own experience in becoming rich. In case its just inherited wealth coming your way, be wary of the advise. When borrowing from relatives make sure they know this is going into a risky venture and that money may not come back any time soon.
3. Working Spouse – This can be a mixed blessing. It can lull you into a feeling that you have infinite buffer and the sense of urgency may get lost. But if you are a nuclear powered individual this can make things really easy. As a bootstrapper you will have enough worries and not thinking about whether you will be able to pay the phone bill next month is one less worry.
4. Personal loan – If you have been getting too many calls of people wanting to give you a personal loan, do evaluate the offer if you are planning to bootstrap anytime soon. Never take more liability than you can handle after failing in the venture and going back to a full time job.
5. Credit card – Same principles as the personal loan. The main purpose in the listing both is because we usually avoid looking at credit card for credit and only as a spending convenience.
6. Part time work, consulting and training – Bootstrapping is a lot about having a constant source of revenue to fund your other venture which requires that money. The balance required between the other activities and your real motive needs another post. It suffices here to say that these days Bangalore has enough opportunities to do quality work part time and make money. If you are good at your craft there will be many companies looking for quality trainers (can make as much as Rs 10,000 a day as a trainer) or negotiate a part time work deal with a company freeing up your time for something you want. The thumb rule should be too charge on a temporary job at least twice as much as you would make in a regular salary in that job. It proves cost effective for the company too, so there are no losers really. The company saves on many fixed costs of owning an employee and you can take those savings. The real trick is to also halve your expenses and then work just quarter of the time you would really work. Since as a bootstrapper you would also be working at least twice as hard as normal employees, you will be able to invest 1.75 equivalent of your normal employee productivity in your venture for sure while sustaining it with regular inflow of money! I like Paul Graham’s idea that starting a company is about compressing your working life in a few years and generating enough wealth for a lifetime.

Working on a post on cash flow management, might take some time.