Some business ideas are not financeable. This is where bootstrapping comes in. Learn how bootstrapping is fundamentally different than financing or venture capital.
- So we're gonna talk about bootstrapping. And the reason bootstrapping is really important is even though the media has created this myth that entrepreneurship equals financing, and one fine morning, you wake up and you decide that's you're gonna be an entrepreneur, that could not be further from the truth. You're gonna have to bootstrap your way to a certain level of validation and traction and understanding of your business.
There's a lot of words and terminology that you're gonna learn in the course of your exploration as an entrepreneur, you'll learn product-market fit and stuff like that. All that kind of needs to happen on your own dime. This is why bootstrapping is so important. The other reason bootstrapping is really important is that some businesses are not really venture financeable. That does not mean that they cannot be successful businesses, they still can be successful businesses, but the venture capital model is specifically aligned, specifically designed for a very specialized class of companies.
And they need to have two characteristics. One is, they need to be addressing very large market sizes, market opportunities. And that, by large, I'm talking billion, multi-billion dollar market opportunities. There are very, very few business opportunities that fit that characteristic. And then there's a second point that you need to be aware of, is that VC's are looking for companies that are gonna grow at an exponential pace.
So you go from zero to a hundred million in five years. That's a kind of business venture capitalists are interested in funding. Again, very few companies have the characteristics of being able to go from zero to a hundred million in five years. So if you take those two criterion and transpose those on your particular business idea, the chances of your business idea fitting that model is not high.
It's a very low probability game. But I really believe that there are many, many, many opportunities out there that are five million, 10 million, 20 million, 50 million dollar opportunities, and perfectly sound sustainable business opportunities, and you can build those businesses and have a perfectly wonderful life. So this is something you can do if you understand the principles of bootstrapping, and it just sets you free from this false mindset that entrepreneurship equals financing.
Entrepreneurship is not equal to financing, entrepreneurship equals customers, revenues, and profits. Financing is optional. Exit is optional.