How the efficient use of capital creates stronger businesses.
Some tech businesses start as a concept funded by investors
Our portfolio companies are different. Their growth has been underwritten by real customers.
It’s called bootstrapping and it’s the philosophy that created companies such as eBay, Microsoft, SAP, Siebel, Business Objects, Sage, Oracle and Cisco.
Bootstrapped businesses are different from traditional VC-backed companies. They know their customers inside out. They’ve proven there’s a real market for what they sell. And they don’t tend to run out of cash.
The challenges of bootstrapping
At some point, bootstrapped businesses often face barriers to growth. They may lack enough cash for investment to keep pace with the market. As the business gets bigger, the founding team can become more risk-averse and may miss growth opportunities.
A small capital base can make it difficult to recruit top-flight executives for expansion. And as the business grows, differences often emerge among shareholders, slowing decision-making. Most important, when a high-growth business hits a bump in the road, it needs advice from a board that has experience with precisely those challenges.
Bootstrapping and growth equity
Kennet believes that taking on the right capital at the right time can help overcome these obstacles and transform a company’s growth rate, without putting its entrepreneurial culture at risk.
We work closely with founders to build outstanding management teams, to take the business into global markets, and to realize the company’s full potential - all without risking everything the founder or management team has worked so hard to achieve.
We also provide expansion capital to fund growth or acquisitions, and offer liquidity to inactive shareholders or early investors in order to ensure everyone is on board for the next part of the journey.
Our white paper on Bootstrap Your Business for Success summarizes why bootstrapped companies are better, what challenges they face, and how growth equity can help them take the next big jump in growth.
Our case studies show how Kennet has helped bootstrapped companies achieve remarkable growth and significant exit valuations.
You will find more links to external resources for boostrappers on our Ideas & Resources page.