Bootstrap Awards, A Celebration of Self Capitalized Enterprise

By Bruce Firestone | Uncategorized

Jan 01

Introduction

The
Bootstrap Awards started in 2004 in Ottawa,
Canada. The
overarching purpose of the Awards is to recognize and celebrate entrepreneurs
in Ottawa, Gatineau,
Eastern Ontario and West Quebec who have
successfully founded new enterprises by self funding or bootstrapping them.

Countdown to
2013 Bootstrap Awards and Adawe Tradeshow

Winners
of Award categories get gold painted construction boots mounted on a wood base
at a lunchtime awards ceremony attended by over 300 people. These awards are
highly prized and last a long time. Media partner Ottawa Business Journal
covers the event and, in addition to gold medal winners, there are silver and
bronze winners as well in each category.

It
is important not only to be doing good work but also to be seen to be doing it,
celebrated and recognized for it and, as well, to teach others what they did to
be successful so that their knowledge spreads, still more startups sprout and
more of them are successful.

Coveted Boots Lined up at the 2012 Exploriem
Bootstrap Awards

In
the five year period leading up to 2010, approximately 91.6% of all tech
startups in the US were self-funded or bootstrapped, 8.1% were Angel-backed and
just 0.3% were VC-funded. It is likely that the proportion of new enterprises
that are self-funded in Canada
is even greater. It is these oft-ignored Small and Medium sized enterprises
that are celebrated at the annual Bootstrap Awards organized by Canadian
Not-For-Profit Exploriem.org.

Organizations
must be seven years of age or less and not have accepted outside funding in
excess of $650,000 (excluding debt). Not-for-profits, NGOs and charities who
apply for awards are exempt from these restrictions.

Organizations may apply in a
maximum of three categories by visiting,https://bootstrap2013.myreviewroom.com.

The Awards

In
2013, there are 13 awards up for grabs including—

1.
Green Award – Nominees should demonstrate how their organization is striving to
improve the environment. Nominees should also address the fact that nothing is
sustainable unless it is also economically sustainable.

2.
Innovation in Engineering & Technology Award – Nominees should demonstrate
how their start-up business applies scientific and engineering expertise to
solve an everyday problem. They must also demonstrate how they invented or
produced this solution.

3.
Best Mobile Application – Nominees should
demonstrate how their mobile application design supports and integrates into
their business model or stakeholders’ biz ecosystem. Success indicators include
design, engagement, usability, traffic, metrics and online sales, as well as
how backend systems power the business model.

4.
People’s Choice Award – The Ottawa
community will vote for the start-up that they believe is the best. The
community will choose the Top 10 People’s Choice.

5.
Best Guerrilla / Social Marketing Award – Nominees should demonstrate how smart
marketing enabled them to get earned media and stakeholder involvement for
their enterprise while cost effectively acquiring customers and clients.

6.
Bootstrap Capital Award – Nominees should show how they self-capitalized and
bootstrapped their new enterprise without help from Venture Capital or Angel
investors.

7.
Best Sales / Value Proposition Award – Nominees should demonstrate how they
found pre-launch and launch customers and clients or describe a technique they
use to accelerate sales. They should demonstrate how they differentiated
themselves from the competition and how they delivered value to their clients.

8.
Community Impact Award – Nominees should demonstrate how their event, campaign
or fundraiser for their not-for-profit organization, charity or NGO, used
innovative and entrepreneurial techniques to successfully fund their activities
or furthered the overall purpose of their organization.

9.
Best Business Model Award – Nominees should demonstrate how they created a
business model for the twenty-first century that produces such great results
that the harder they worked the more money they made. They also have to show
how their business model gives them a lasting, sustainable, competitive
advantage and “concession” or “franchise.”

10.
Customer Service Award – Nominees should demonstrate how they provide
superlative customer service for their clients and customers.

11.
Fastest Growing Start-up Award – Organizations whose top-line growth is
significant will want to apply for this award. The organization must be 7 years
old or less and must not have received outside funding of more than $500,000.
Results for the current year and two previous years are required; these are
kept confidential.

12.
Lead To Win For Women Award – The objective for Lead to Win for Women Award is
to support women-founded enterprises, helping them to develop viable,
sustainable, growth-oriented enterprises. This award recognizes Eastern
Ontario’s and Western Quebec’s top female
entrepreneurs whose enterprises have the highest growth potential.

13.
Teen Entrepreneur Award – Nominee must be between 13 and 19 years of age (born
after February 21st 1993). Nominees must demonstrate their entrepreneurial
drive with concrete examples. Through viable business ideas, entrepreneurial
class projects or causes lead by nominee. (ie: fundraising initiatives for
charities and non-profits)

Self Capitalization Becoming
More Important

‘Empty pockets never held
anyone back. Only empty heads and empty hearts can do that,’ Norman Vincent
Peale.

The role of investment banking
firms, venture law firms, commercial banks, public financial markets and
securities firms is limited in the startup process. In Fool’s Gold, The Truth
Behind Angel Investing in America (Oxford University Press, 2008), Scott Shane
estimates that approximately 600 (pre-revenue) tech startups were funded in the
US by VCs in 2004 while about 35.5% of all Angel-backed startups were
pre-revenue. This works out to approximately 16,000 startups funded by Angels
each year during this period (J Basil Peters,http://www.angelblog.net/Angels_Finance_27_Times_More_Start-ups_Than_VCs.html).

The
US Census Bureau’s BDS data base suggests that an average of 198,000 tech
startups (defined as those with 100 employees or less) were created per year in
the five year period leading up to 2010 in the United States. Taken together
and as noted above, these figures imply that 91.6% of all startups during this
time were self-funded or bootstrapped, 8.1% were Angel-backed and just 0.3%
were VC-funded.

What is Self Capitalization?

If
an entrepreneur is someone who efficiently use scarce resources, most of which
are not their own, to disrupt the status quo, where does s/he get those
resources from? Often they receive funding from future customers/clients and
suppliers. Sources such as commercial banks and government support programs
play a lesser role than they once did. Commercial banks in Canada and most
of the world tend to lend money to people who already have significant
collateral while governments may take too long to make decisions and provide
support.

Self
capitalization techniques are useful not only to for-profits businesses but
also non-profits, charities and NGOs. New sources of Bootstrap Capital are
being discovered all the time. No list can be complete but self capitalization
techniques as they are currently known are summarized at,
http://www.eqjournal.org/?p=1171. Below are some of the primary sources of
bootstrap capital for startups—

1.
Soft capital—money from family and friends
2. Home equity loans—ultra low cost debt secured by the value of your primary
residence
3. Future customers—acquiring cash from launch clients in advance, securing
deposits/retainers/progress payments from customers earlier in the deal flow
4. Future suppliers—getting credit from trade contractors, paying later in the
deal flow
5. Strategic partners—organizations providing various forms of support (cash,
credit, office space, tools, personnel) because they stand to benefit from your
offering
6. Micro capital lending—programs that quickly provide small amounts of capital
with few strings
7. Government support programs—such as the SBL (Small Business Loan) program in
Canada
that only requires founders to personally guarantee a small percentage of the
loan or SR&ED Tax Credits and NRC-IRAP grants
8. Rights fees—upfront payments to be included in a product launch
9. Product placement—fees paid to be featured in a product launch
10. Licensing fees—royalty payments on patents and other IP
11. Consulting services—moonlighting to support a startup
12. Partners—providing cash and valuable skills
13. Investors—seeking higher returns
14. Financial leasing—pledging fixed assets
15. Factoring—trading receivables for cash
16. ESOPs—Employee Stock Ownership Plans
17. Advertising—securing sponsors who want to be associated with your new
product or service
18. Trading—buying low and selling high/asset flipping
19. Credit cards—multiple providers
20. Accretive buying—having more cash on hand after buying a company than
before
21. Accretive selling—providing customers with 3rd party financing
22. Script—coupons redeemable in trade by suppliers, customers, employees
23. Crowd funding—non monetary compensation for supporters who supply cash
24. Seller Take Back financing—low cost financing provided by Vendors
25. Sweat equity—supplied by founders.

Conclusion

Financings
have been done for a long time using two basic types of capital—equity and
debt. However, if we ask the question, ‘What is cheaper—debt or equity?’ with a
follow up question, ‘What is cheaper than debt and equity?’ we may conclude
that self capital is a new form of funding. Debt is usually cheaper than equity
and bootstrap capital is usually cheaper than both because, essentially, it’s
free.

Supplier
credit is often extended to startups without cost (that is, without interest or
other fees usually associated with financings) because, if the startup is
successful, a supplier has helped to create a new client for itself, often a
very loyal new client.

Clients
can also be induced to extend credit to a new enterprise (in the form of
deposits/retainers/progress payments) without cost because, again, if the
startup is successful, the client has helped to create a new supplier for
itself, often a very loyal new supplier.

Self-capitalization
methods are tremendously varied. It subsumes sweat equity which is, of course,
a form of human capital—capital contributed by startup founders in the form of
free or low cost labour.

Internet
tools are abundant and many are available for free or practically no cost.
These let you bootstrap a website, online store, blog, social media presence,
do basic accounting, make and receive payments, process credit cards, backup
your data, share data and transfer data for no money or very little money. It
is much easier to start a business in the 21st Century than at any other time
in recorded history.

More information on the
Bootstrap Awards—

Ms.
Brianna McKay
Project Coordinator | Exploriem.org
900 Morrison Drive
| Ottawa ON
| K2H 8K7
Tel.: 613.566.3436 ext. 209 | Fax: 613.422.2807
Website: www.Exploriem.org | Twitter: @BriaMckay

Winners, Past Three Years

2010
New Micro Business of the YEar – Network Hippo Inc.
20 and under Startup – Stewart Supreme Vending
New Web Site of the Year – Wedding Republic https://www.weddingrepublic.com/
Best Sales/Pre-Sales/Launch Clients – CrowdWave Games
http://www.crowdwavegames.com/
Value Differentiation Technique – UCreate Media
Best Pixie Dust Technique of the Year – BSETC http://www.bsetc.com/
Most Innovative Source of Bootstrap Capital of the Year – MartSmart Shopping
Network
Best Guerrilla Marketing Idea or Campaign of the Year – Social Mention
http://socialmention.com/
Most Innovative New Bootstrap Business Model of the Year – Shopify
http://www.shopify.ca/
Fastest Growing Bootstrap Startup – Telepin Software http://www.telepin.com/

2011
Best Micro Business – FaveQuest http://favequest.com/
Best 20 and Under Startup – Jennifer Lee Promotions
http://www.jenniferleepromotions.com/
Best website – Manpacks http://www.manpacks.com/
Best Technique for Sales/Pre-Sales/Launch – Vertigrow
Best Value Proposition/Value Differentiator/Pixie Dust – Patientway
http://www.patientway.com/
Most Innovative Source, Bootstrap Capital – IdeaVibes http://www.ideavibes.com/
Best Guerrilla Marketing Idea/Social Marketing – Zeebu Mobile
http://www.zeebu.com/
Most Innovative Social Enterprise Fundraiser – Ottawa Humane Society
http://ottawahumane.ca/
Most Innovative Business Model -SokJok http://www.jokwear.com/
Fastest Growing Startup – Inovatech Engineering
http://www.inovatechengineering.com/

2012
Best Business Model – CanaFlora https://www.canaflora.ca/
Innovation in Engineering and Technology – Crack Semiconductor
http://cracksemi.com/
Lead to Win for Women- Amanda R A Lunan | Auntie Loo’s Treats
http://auntieloostreats.ca/
Bootstrap Capital – Apption Corporation http://apption.com/
Best Guerilla Marketing – Toletta http://www.toletta.com/
Community Impact – Shepherds of Good Hope http://www.shepherdsofgoodhope.com/
Green Award – Rumidifier Home Comforts Inc. http://www.rumidifier.com/
Best Mobile App/Website – Spoonity Inc. http://spoonity.com/en
Best Customer Service – Blue Rabbit Machines http://bluerabbitmachines.com/
Best Sales/Value Proposition – LavaBlast http://www.lavablast.com/
People’s Choice – Dermis Advanced Skin Care
http://www.dermisadvancedskincare.com/
Fastest Growing Startup – Stoneshare http://www.stoneshare.com/

@ProfBruce
@Quntum_Entity

The SKIP-AID Ottawa 2013
sponsor/partner form is also available for download as .ppt file from: http://www.old.dramatispersonae.org/skip-aid-sponsor-form-v-3.ppt

Dr.
Bruce M. Firestone, Founder, Ottawa Senators; Author, Quantum Entity Trilogy,
Entrepreneurs Handbook II, Urban Nirvana and the Peradventures of Maddy
Henderson (2014/5); Executive Director, Exploriem.org and Learn By Doing
School; Broker, Century 21 Explorer Realty; Entrepreneurship Ambassador, Telfer
School of Management, University of Ottawa.