Ready to Bootstrap? Consider These 5 Real-Life Stories.
Bootstrapping isn't always the path to riches. In fact, it's risky -- and a mixed bag when it comes to success.
Entrepreneurs often glorify the idea of bootstrapping -- starting a business without the aid of venture capital or angel investors and using only the profits from the business to invest in that business's growth. If you manage to grow your startup from scratch this way, you can take it as a point of pride that you didn't need anyone else's help.
And if you're an aspiring entrepreneur in the planning stage, bootstrapping can be an inspiring idea: starting a business no matter how few resources or contacts you have.
But, is bootstrapping all it's cracked up to be? Probably not. In fact, it's more accurately a mixed bag, as these five stories illustrate:
1. Kimberly Causey lived in an RV.
Kimberly Causey bootstrapped her furniture factory outlet guide from nothing, as described by Inc. When she wanted to make product book available, she realized she couldn't afford the costs of professional printing.
So, instead of seeking funding, she bought $200 of printed covers, then used a home printer and a hot glue gun to manufacture the finished products herself. After a successful round of distribution, she made the rounds on morning TV shows and left her apartment to live in an RV for years, touring bookstores to get featured and drive sales.
2. Under Armour started out in a basement.
Under Armour is currently a publicly traded, international company with a total revenue of nearly $5 billion. But it started as a bootstrapping endeavor by founder Kevin Plank. Back in 1996, when Plank was 23, a simple idea to create better clothing for athletes led him, as the company's website details, to create a shirt with moisture-wicking fibers.
Because he didn't seek funding, Plank was forced to work out of his grandmother's basement and sell prototypes of his clothing out of his car up and down the East Coast. His plan worked: Within a year, Under Armour made more than $17,000 in sales, which in turn funded a massive expansion of operations.
3.Tableau Software grew from a few thousand dollars into a $100 million business.
The co-founders of Tableau Software -- Christian Chabot, Chris Stolte and Pat Hanrahan -- were skeptical of investors and venture capitalists. Wanting to start a business, each, according to Forbes, contributed a few thousand dollars to the cause and volunteered to make serious lifestyle changes to support the business.
In short: They didn't draw a salary, they downsized their homes and they slashed their personal spending. Eventually, Tableau Software accepted external funding, but only after it developed into a stable, thriving company through bootstrapping alone. In those early years, the company's co-founders had to make significant sacrifices.
4. Spanx continues to be entirely self-funded by Sara Blakely.
Sara Blakely's story is fascinating, Business Insider has noted. Now a billionaire, Blakely had a long history of failure, never making it as a standup comedian, failing to do well on the LSAT law school entrance exam twice and even getting rejected as a performer at Disney World.
Ultimately reinventing herself to create a makeshift undergarment made of pantyhose, Blakely decided to use $5,000 of her personal savings to invest in her new company, Spanx. The product was a hit: In its first year of operations, Spanx saw revenues of $4 million, so Blakely was able to continue self-funding the business. To date, she remains the sole owner and has since become a billionaire thanks to her efforts.
5. Kevin Smith filmed the hit comedy "Clerks" using 10 maxed-out credit cards.
Filmmaker Kevin Smith has led a respectable career in Hollywood, but his first film Clerks was entirely bootstrapped because he had no other option. The film cost a mere (in movie terms) $27,575, but to raise that sum, Smith had to sell his comic book collection, get a donation from family members, then go and max-out 10 different credit cards, according to ViewAskew.
That was a highly risky decision but the movie went on to make $3.2 million at the box office and launched Smith's career, though even the film's explosive growth was never guaranteed. It was a huge risk that paid off.
Entrepreneur Leadership Network Contributor
Anna Johansson is a freelance writer who specializes in social media and business development.