{"id":3494,"date":"2017-03-06T11:36:27","date_gmt":"2017-03-06T19:36:27","guid":{"rendered":"https:\/\/masonmyers.com\/?p=3494"},"modified":"2017-03-06T11:36:27","modified_gmt":"2017-03-06T19:36:27","slug":"bootstrap-companies-succeed","status":"publish","type":"post","link":"https:\/\/masonmyers.com\/bootstrap-companies-succeed\/","title":{"rendered":"Bootstrap Companies Succeed Without Big Venture Capital"},"content":{"rendered":"

Five out of six of the fastest growing companies in the US grow with\u00a0capital from sources other than traditional venture capital. \u00a0How about the banks? Talked to an entrepreneurial banker lately? Didn’t think so. Bootstrap companies are creative in finding capital, often out of simple necessity. \u00a0This often creates stronger companies because an abundance of capital did not allow them to delay addressing their flaws.
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Capital Imbalance in Need-vs-Supply Creates Contrast to Larger, Publicly-Traded Companies<\/h3>\n

The chart here shows\u00a0research done at Pepperdine University on the capital shortage for smaller companies. \u00a0My fund, Greybull Stewardship, works\u00a0to fill this need for capital that is not being met by traditional venture capital and private equity funds.<\/p>\n

Bootstrap Offers More Opportunities<\/h3>\n

This dynamic among smaller companies stands in stark contract to the dynamic for larger and publicly-traded companies. \u00a0Since 1997, the quantity of publicly traded companies has fallen by half, to 3,200. \u00a0While the quantity of dollars under hedge-fund management has increased by 2,500%. \u00a0It is no wonder that hedge funds have under performed lately. So much capital chases so many fewer publicly traded companies. \u00a0If an investor seeks an edge, she can more likely find it in the smaller valuations. An edge in the larger valuations now becomes\u00a0harder to find.<\/p>\n

Traditional Private Equity and VCs Can’t Exit So They Don’t Enter<\/h3>\n

Bootstrapped company owners have the traditional problems of growing companies — expansion opportunities, family wealth diversification. But they don’t have the traditional sources of investment capital. And, those traditional sources also may not be aligned mutually with objectives for growth rates, exit timelines, governance, and more. \u00a0At Greybull Stewardship, our goal continues\u00a0to be the perfect capital partner for bootstrapped companies. And then we\u00a0place as few restrictions on the company as possible from the fund. \u00a0We grow as it makes sense. We do not force a sale\u00a0on an artificial timeline. \u00a0Greybull does this because we started out as company founders, not investment bankers. We believe that providing this freedom to pursue the best strategy for the company leads to the best long-term financial returns for ourselves and our investors.<\/p>\n

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