If by bootstrap you mean get up and to a point where there's a real company with a working if basic product and some real users... i.e. ready to talk to VCs and such about much bigger investment to scale up...

Well, Y Combinator does that kind of thing with less than $20k investment in web startups.

Paul Graham also has nice article on how to fund a startup which describes the same ground in different ways.

In that article he talks about a seed round that might be much less than $20k, an angel round that might be of the order of $200k, and finally VCs, with maybe a $2m funding round.

Of course the real answer is "it all depends", but for plenty of web startups with young technologists for founders, it doesn't take a lot of money for that first seed stage.

This is a good question, and I must say there is no exact answer or easy answer for it. A lot of entrepreneurs make the mistake of spending too much or too little on bootstrapping. There isn't really an exact amount, but just spend within your budget.

I manage an excellent guide: How To Calculate Start Up Costs for a Business and this guide should be one you should check out. It will probably answer more questions that I can in this answer, but see for yourself. I'm pretty sure it will be your guiding light.

How To Calculate Start Up Costs for a Business

See towards the bottom where you will find the startup cost calculator. This should be a helpful link: http://www.businessknowhow.net/bkh/startup.htm

This guide should assist you with any startup business, no matter how great you think the idea is.

Now, onto your questions:

How much, on average, do you spend bootstrapping a start-up?

This depends on a lot. It depends on your startup, your location, and your budget. I think that too many entrepreneurs fail and think spending more will mean better results, which is not always the case. Then there are entrepreneurs who spend too little, and do not get the results they are looking for.

First, always ask yourself what you need to spend on? Is it equipment, consultants, etc. It's true that you will have a lot of expenses, legal, marketing, PR, product development, etc. but ask yourself which ones you can cut out.

You may not need an elaborate office building right away. Ask yourself, can you work out of your home?

Do you really need a publicist or can you handle your own PR for a little while?

For product development, can you develop any of the product on your own? If not, find someone who can assist you with the development of the product. You'd be amazed, sometimes the best people for developing your product do not need to live down the street, but can be in another location. It might be good to find someone local as well, and also look for someone who might want to work for lower wages, or possibly find some interns who will be able to assist.

What do experienced entrepreneurs and venture capitalists think is a "reasonable, but not excessive" amount to have spent bootstrapping an internet company?

There is no answer to this! Some startups have spent thousands to millions of dollars on bootstrapping an Internet startup company. I've heard of companies that are going to raise $10 million dollars from venture capitalists, and they spent $3 million bootstrapping it. Then again, I found some startups that have spent a few thousand dollars, and they were able to raise a series A round. There is no exact answer, and the venture capitalist usually cares more about what you have, where you are, and where you are going in the future. You can spend a lot, and get very little, or you can spend a lot and get a lot, but how well executed is your product?

What approaches do start-ups use to keep their cashflow under control?

This is a good question, and not all startups do the same. Some startups outsource development, others spend less on staff by finding partners, and those who will work for equity, and interns who will work for very little. Others will work out of a home office before getting an office. If you don't get an office, get a Post Mailbox or P.O. Box to start, then get an office later on when you can afford it. An office is not the most important thing for a startup. Many entrepreneurs have worked out of garages or their apartments to get their startups going.

Is there any research published on this subject?

Yes, you should read the book "Art of The Start" by Guy Kawasaki and watch the video below. Guy Kawasaki said, "you need to make meaning"

Have any start-ups published blogs or articles on how much they spent?

Most companies do not publish this information, but I do know that Guy Kawasaki claims he spent $10,000 to launch his site AllTop.com http://www.alltop.com however, I do believe he has spent more to develop AllTop.

How do costs vary based on location?

Good question, and location is very important to costs. In some cities you will pay more for people who develop and program than others. It's a known fact that a developer in San Francisco or New York City will cost you more than one in a lesser developed area. You might spend less if you outsource a developer in Asia or Europe than the United States, but I would be very careful about choosing an outsourced developer partner. You should look for people in your area, but be open minded to developers everywhere who want to work on your Internet startup. Start in a location you feel comfortable, and a location where you can reach out to advisors and people who can assist you, rather than starting in an area where you will not get any support. In bigger cities, there are usually more angel investors or venture capitalists. Especially in the Silicon Valley, there are more VCs than anywhere else.

Are there any lists of suppliers recommended by experienced entrepreneurs?

Yes, it all depends on suppliers you're looking for. What kind of suppliers? I would be happy to provide references to someone who might be interested in a supplier. Are you looking for a hosting supplier, a web development team that works with startups, or something else?

It would be good to know more about the following first:

1. Your goals
2. Your budget
3. Your project and vision

No entrepreneur starts without any challenges, and by challenges I mean it's not easy finding the right team, the right people, and so forth. Nobody will ever see your vision as you do, and you have to reach out to others who will believe in your vision, like your ideas, and be able to work with you. If you aren't working with the right people, it can make things much more challenging, make your project take longer, and so forth. It's important to find people who want to make your Internet company a success.

Thank you! Hope this helps and best of luck with your startup!

I am sorry, could you expand a little bit more on the internet business you are looking at? I am having difficulty answering your question. I keep coming back to what kind of business and am hoping to get a little more information.

Internet business is a large term and the more specific you are in your question, the better focused answers and information can be to assist you.

I understand that it is a start up and there are issues with people trying to do the same idea for example, but any information you can (and are comfortable) sharing would help us (if not just me) research this answer for you.

THANKS

I would like to recommend ideas from John Nesheim. He has "since 1976, … coached more than 300 new ventures…, have raised over $2 billion in financing”. He is the author of books “High Tech Start up” and “The Power of Unfair Advantage”. He is a veteran in silicon valley VC. I would like to recommend his 2 books, especially the 1st book, for any high tech startup entrepreneurs.

John Nesheim’s blog
John Nesheim’s website

This post says “The first round of cash from outside investors is named the Seed Round. For a Bootstrap startup, it comes from your personal bank account. For classical new enterprises, it can come from a motley crew, from various sources. Often they are supplied by angels (wealthy individuals) or the infamous FFF: Family Friends and Fools. Some top tier VC firms do Seed Rounds, but they are in the minority. Seed Rounds are typically less than $2 million, most often in the range $0.5 to $1.5 million. “

This post shows a bootstrap case.

From this post post of his “FINDING STARTUP SEED CAPITAL: When, How Much, Who, Valuation”:
Raise enough to complete your first major milestone.
Raise more than you think you need.
Expect the percentage the seed investors get to be independent of the amount of cash you raise.
Forecast your first 24 months of cash burn by month in Excel.

He provides tools (Quickup, Bplan) in his website to forecast financial statements and value a company.

Please refer to his post for more details on seed capital. There are 5 parts in his “FINDING STARTUP SEED CAPITAL: When, How Much, Who, Valuation” series. You may search “seed capital” for more insights in his blog.

Cashflow:
Posts in category “Finance and Money” in Nesheim’s blog are insightful.

Hope this helps.
I’m curious to know which country your venture is in.

I have compiled a list of entrepreneurship blogs in my innovation blog’s bloglist, such as John Nesheim, Guy Kawasaki, Seth Godin, Mark Cuban etc..

Burn rate: how I survived the gold rush years on the internet maybe useful too.

Research and Markets is a good source of information. Try to search using terms like “seed capital”, “VC”.. You may pinpoint better reports by your detailed field and country.

All the best to you for your venture. Good luck.

how to start a business?

First Steps to Starting Your Own Small Business

Sometimes youve been dreaming about what it would be like to start your own small business. It has been on your mind since you were in school, and there are times, especially on the morning, that you daydream about it how to start a business. But, youre not really sure what it would look like. You dont have the first clue starting a business, and of course, youre afraid that you would put your heart and soul into it, only to fail and look like a fool. You barely even talk about it out loud, because you dont want your family and friends to laugh at you. But, anything is possible! The only limitations we have are the ones we put on ourselves! With planning and learning the steps, and doing your homework, if this is something you really want to do, you can do it, AND succeed greatly at it, too!

Okay, so now youre ready to take the next step! First, in order to help you focus, start working on your business plan. It helped you determine exactly what you want, what you offered, why you offered, whose your ideal client is, whose your target market is, whose your competition is, where you would offer your services, how you would offer them, and so on.

There are resources specific to most specific fields, too, including other professionals who help others get started. Do your research to see who you can contact for support and to ask questions of as you progress. Once you have your business plan in place, its not time to celebrate, yet! How are you going to accomplish the goals you have come up with in that plan? You next need a marketing plan. Now, although the marketing plan is also part of a business plan, its really just the intro! The marketing plan will become your template, your schedule, and will spell out the actions you will take to make those goals reality. If you use it seriously, it will be your day-to-day guide to making your dreams come true!

source: http://facelooknow.com
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