RESOURCES FOR THE

VENTURE
THE ENTREPRENEURIAL
APPROACH: seizing opportunity
and pursuing it REGARDLESS of
resources currently controlled

Entrepreneurial Approach to
Resources:
Resources include:
People, assets, financial resources,
business plan
Need for resources and the ownership and
management of resources are viewed
differently from in large organisations
Seek to use the minimum possible amount of
all types of resources at each stage
Rather than own the resources they seek to
control them

Using this approach to reduce

risk
Staged Capital Commitments
Smaller initial capital, matching capital infusion with
milestones
Less Capital
Reducing financial exposure and dilution of the
founders equity
More Flexibility
Owning vs. Not owning
Low sunk cost
Ability to abort at any time
Lower costs
Reduced risk
Less exposure, lower risk of obsolescence

FUNDRAISING:

Startups typically lack criteria used by

investors:

Scale, proprietary advantage, well-defined plans,

well-regarded founders!

Most ventures are low-budget start-ups!

80% ventures in USA financed by:

Personal savings
Credit cards
Second mortgages

OTHER SOURCES:

FINANCIAL:

Commercial Banks
Friends
Family
Savings personal, partner
Suppliers
Customers
Sale of assets

NON-FINANCIAL:

Advice
Network contacts
Favours
Human capital - reputation

ISSUES IN ACCESSING
RESOURCES
1.
2.

3.

4.

Takes time
Costs legal fees, stamp duties,
consultant fees, accounting fees
Information needs for investors,
bankers; how much to reveal?
Top management attention

Minimising Resources

According to Greg Gianforte lack of

money, employees, equipment even a
lack of product is a huge advantage
because it forces the bootstrapper to to
concentrate on selling to bring in cash
Question- How to do more with less and
pursue the opportunity

BOOTSTRAPPING:
(Minimising resources)

Lack of resource intensity

At each stage, accomplishing more with a
little less
Opposite attitude in large organisations
Famous Bootstrappers:

Clorox
Marriott
Gateway
Black & Decker
Hewlett Packard
Dell

Nike
Apple
Dominos
Microsoft

OPR (OTHER PEOPLES

RESOURCES)

Important in early stages:

Money loans, equity, grants
People (staff)
Space
Equipment
Material
Advice, technical assistance
(Build your brain trust)
Bartering

Brain Trust
The right advisors and brain trust
members provide critical value. Identify
individuals with the know-how,
experience, networks , and access to
critical talent, experience and resources
that can make the difference.

BUILDING RELATIONSHIPS:

Educate your financiers about your business

Keep to the agreed terms and commitments
pay on time!
Communicate bad news fast!
Consider them part of your team
View them simply as another supplier, but a
key one
Let them know you have options
Know what others can offer!

MANAGING YOUR BANKER:

Does it:
See you through adversity?
Save you time?
Treat you as an individual?
Understand your business?
Teach and advise?
Do something special for you?
Accept responsibility for its mistakes?
Let you borrow against the future?
Find customers for you?
Help you search for alternatives?

BOARD OF DIRECTORS:

Part of the team

Careful evaluation of missing experience,
know-how, contacts
External directors objectivity
Choose directors for objectivity, integrity and
special skills
Define role, responsibilities, structure
Consider liability take steps to minimise
Compensation!
Alternatives to a formal board

PROFESSIONALS:
Attorneys
Consultants
Accountants
Bankers
Selection:
Experience, expertise
Integrity, reputation (seek testimonials , trust
but verify)
Client base
Size, support
Cost
Chemistry do they fit with you?

BOOTSTRAPPING TO
SUCCESS:

Get operational quickly target small

market, then seek other opportunities
Look for quick break-even, cashgenerating projects
High value products or services that can
sustain direct personal selling

BOOTSTRAPPING TO
SUCCESS:

Keep growth in check

FOCUS ON CASH, NOT PROFITS OR
MARKET SHARE!
Cultivate banking relationships early
Abandon the rules, and be flexible!
Seek opportunity everywhere, all the
time!

Financial Resources

Evaluate financial requirements after all

resource needs have been identified
Important to realise that cash is the life-blood
of the venture (not profit)
Financial resources are always limited thus
trade-offs
Spreadsheets- see what the venture will look
like financially in a given time frame. Use
what if scenarios