Yesterday I was talking with a couple founders that had bootstrapped their company to a great spot and were debating whether or not to raise money. Having had this conversation dozens of times, I brought up the Rich or Royal concept. Simply put, there’s a tradeoff between raising money (going the “rich” route) and maintaining control (going the “royal” route). Most entrepreneurs that want to raise money don’t think through how having other investors changes things, and in most cases, reduces their control.
Here are a few questions on rich or royal:
- How much of being an entrepreneur is about controlling your own destiny and being your own boss?
- How much of being an entrepreneur is about making a large amount of money as quickly as possible?
- How much of being an entrepreneur is making a major impact on your industry or city?
- How much of being an entrepreneur is about creating a certain lifestyle or quality of life?
There’s no right answer to the rich or royal question. Yes, some entrepreneurs get to be rich and royal, but that’s even less common. My recommendation: think through the rich or royal question and be intentional about it.
What else? What are some more questions on rich or royal?
David Cummings on Startups 
Thanks for helping educate founders about how to proactively make decisions that will increase their impact and success, David! Great to hear how far those founders were able to get while bootstrapping.
Rich or Royal/King are actually outcomes that coalesce from lots of early founding decisions. Each decision tends to increase the chances of achieving one outcome while decreasing the chances of achieving the other. (That’s why so few founders are able to achieve both.) To help founders tune into patterns across those early decisions, I created a 5-minute founder self-assessment using 16 of the most important ones highlighted by my research. For instance, it includes the question you mention about bootstrapping vs. taking outside capital, but also whether to go solo vs. co-found, whether to retain equity vs. give up a chunk to co-founders or hires, and a bunch of others.
I find that when I ask things like, “Do you you want have a major impact?” I get less useful introspection (“Who doesn’t??”) than asking those 16 tangible trade-off questions and seeing if a pattern emerges across them.
You can see them at the Survey section of noamwasserman.com. Hope it helps flesh out more of the picture.
For those of you that are not familiar with Noam’s work, he is the author of “The Founder’s dilemma” That is a book that every entrepreneur should read before founding a company. It will save you a significant amount of pain down the road from decisions you may need to make early in the life of the startup.