Bootstrapping vs Investor backedApr 10, 2023
I recently had an eye-opening experience at a meeting with a bunch of designers, and I wanted to share my thoughts on starting a fashion brand with investors versus bootstrapping.
First off, let's define bootstrapping. It's basically starting and growing a business with little to no external funding. This means you rely on your own resources, whether that's savings, personal credit cards, or revenue generated from the business itself. Hence the name bootstrapping.... you are doing it solo.
On the other hand, starting a fashion brand with investors means you're getting outside funding from venture capitalists, angel investors, or other sources like crowd funding. This can be a great way to jumpstart your business and get access to resources and connections you might not have on your own.
Now, at this meeting, I was surrounded by designers who had taken the investor route, and let me tell you, it wasn't all sunshine and rainbows. Many of them had given up a significant amount of control over their business and were beholden to the expectations of their investors. That means you have to adapt your creative style, your designs all to make investors happy... and generate more money for them.
But what really struck me was the difference in mindset between those who had investors and those who had bootstrapped. The bootstrapped designers were focused on building a sustainable business on their own terms, while the investor-backed designers were often fixated on growth at any cost.
I firmly believe that bootstrapping is the way to go for a few reasons. First, you get to keep your freedom and make decisions based on what's best for your business, not what your investors want. Second, you can build your business at your own pace and not feel the pressure to constantly scale. Third, you don't need a million customers to make money - you can be profitable with a smaller, dedicated customer base. And finally, you'll sleep better at night knowing that you're in control of your own destiny.
Now, don't get me wrong - there are certainly benefits to having investors. But for me, the downsides outweigh the upsides. I've bootstrapped my own business, and while it's been a lot of hard work, I wouldn't have it any other way.
So, if you're thinking about starting a fashion brand, I urge you to consider bootstrapping. It's not the easy way out, but it can be incredibly rewarding in the long run. And who knows, maybe one day you'll be at a meeting with other designers, telling your own story of how you built your business from the ground up.