Hi, and welcome to part two of the Bootstrap Blueprint. In this video, you’re going to learn some advanced bootstrapping strategies and tactics. If you missed part 1, you can click on the link at the top left-hand of this page and watch or download the video later.
Now for those of you who don’t already know me, I’m Martin Soorjoo, founder of the San Francisco-based Investor Pitch Clinic. I was an award-winning attorney for 15 years, and now I coach startups who are launching and trying to raise capital.
I just wanted to say thanks for the tremendous feedback we’ve had on part one. The tweets, the comments, the emails, they inspire us. In the last video, we looked at the critical role of mindset for successful bootstrapping and the beliefs you need to adopt — how you can reduce or eliminate people costs, how you can reduce or eliminate legal costs, and bootstrapping strategies for dealing with your customers and vendors.
In this video I’m going to show you four highly effective but underused options for financing and resourcing your startup that you must consider, twelve effective strategies and tactics and I’m going to show you how you can use our blueprint to help your bootstrapping efforts. As with the last video, today’s video is going to be fast paced and content rich, but, as with all of our videos, you can download them and watch them at your leisure.
Now, I’m going to start with crowd funding. A lot of people don’t really understand how crowd funding works, they don’t believe it’s relevant to them. They think it’s only for arts and they don’t believe that you can raise that much. And it also seems that some investors are concerned that crowd funding will replace them as a source of start up funding.
So let’s look at three projects which demonstrate the true potential of crowd funding. The first is TikTok. This piece of technology enables you to transform your Nano into a watch. The founders of TikTok only wanted to raise $15,000, but instead they raised just under $1,000,000 in under three months.
And the best part is they didn’t have to give away equity or repay any loans. Diaspora is an open source social network. Their funding goal was $10,000, but, in fact, they went on to raise just under $200,000 in under three months. Third project, Sitari. This piece of technology enables your camera to follow your every move.
Which clearly for some people could be a bit of a problem. The founders there wanted to raise $20,000, but instead they raised $25,000 again in under three months. So how crowd funding work? Well there are some variations but most models operate on a donation and reward basis. You post your project on your site and you specify how much you need and for what purpose.
You create a compelling video and description about your project And you offer a range of rewards to people who back you. So for example, you might offer a copy of your product, or your software. And lastly, you let your network know and you let the whole world know that you have a project that needs backing.
Now, crowd funding isn’t easy, it takes effort and creativity. But on most platforms, you don’t have to give away equity and there’s certainly no need to repay loans These are donations. So we strongly suggest that you consider crowd funding as part of your bootstrapping strategy. Now we’ve analyzed the reasons why some crowd funding project succeed and some fail.
And we’re going to cover exactly what you need to do to successfully crowd fund your project in a future video over the coming weeks.