Being bootstrapped: how does it encourage more ownership in startups?

When a funding crunch prevails, going the bootstrapped way is the best modus operandi suggested by industry experts. Bootstrapping comes with its own set of challenges for entrepreneurs.  Bootstrapped pioneer like founder Sridhar Vembu says that “money always comes with strings attached.”

This Bengaluru-based startup has walked the talk for the last three years and has managed to clock Rs. 36 crore in revenue for the year ended March.

Speaking about their journey, two of the four co-founders Dhiraj and Aditya opened up to Entrepreneur India about their journey at Campus Sutra – an apparel and accessories company that creates designs that Indian youth can identify with.

Campus Sutra has raised a couple of million dollars in debt from banks and all the equity is owned by the four co-founders. Dhiraj said that being in a situation wherein one is not desperate to raise funds is much better than being in a scenario where you are in the fear of shutting down if you don’t manage to receive funds within a certain period.

Bootstrapped encourages ownership

Talking about the difference in being bootstrapped Dhiraj said that when you take business decisions more cautiously as  he gets the money keeping his personal assets under mortgage. Decisions are taken on the basis of concrete advice and keeping growth in mind and looking at business principles, he says.

“I would advice entrepreneurs that if you are a bootstrapped company it usually helps you set up the fundamentals of the company in a very businesslike manner rather than merely chasing valuations,” Dhiraj added.

What helped them bootstrap easily?

Aditya said that one of the key things that helped them carry out their business operations without external funding was the implementation of right hiring strategy. The company believed in hiring right and hiring when the time is right.

The duo also felt that having a team of co-founders having complementary skills helps in sharing the work in the initial days. “Hiring is a lot easy when you have an investor on your side because the one who comes to give the interview knows that there is no shortage of money. In a scenario of being bootstrapped, the employee joins only on an entrepreneur’s word. You need to sell your vision,” Aditya said.

The duo also added that they never asked their employees to do something; they are not practicing and try to maintain a lean structure to ensure fairness within the company.

The company aims to become a preferred medium of expression for Indian youth. It wants to be known as innovators as a company and ensure we achieve “cult” status among our target audience.

Here’s what they expect from investors

Campus Sutra has so far managed to make their mark on their own. Though they are looking for investors today, both Aditya and Dhiraj confessed that they were not in desperate need of funds. The company aims to find investors who understand the vision that it’s slated to achieve.

The company plans to achieve revenue of Rs. 100 crores next year and Rs. 300 crores in the subsequent years. It also aims to expand out online as it sees its offline being limited and wants to cover the entire clothing and accessories category.