Should you go it alone?

Is a big chunk of change worth an arm and a leg? In other words: Should you try to bootstrap your growth or go out in search of investment capital?

When it comes to fundraising, that’s the question that faces many high-growth entrepreneurs. It’s not an easy question, and the answer, for you, may be different than it would have been 5 or ten years ago. It depends on your industry.

I ventured out of Silicon Valley this week to Portland, Oregon, where tech entrepreneurs are building their companies even though local venture capital is all but nonexistent. Their stories highlight some of the risks of taking venture capital and the benefits of bootstrapping, especially for companies that aren’t necessarily going to show a 10x return in five years.

Even if you think you can do a 10x return in five years, you need to be sure your VC firm will be around long enough to see you through. A lot of firms are on shaky ground right now. You don’t want your major investor to be forced into receivership, and your company’s equity to be forked over to a liquidator.

Read more for four considerations when deciding whether or not to bootstrap.

Laura Smoliar

Published with permission from Inc.com. Laura Smoliar has 15 years professional experience and a Ph.D. in physical chemistry, specializes in the commercialization of technology. She is currently CEO of Peppertree Engineering.

Source: Inc.com