Bootstrapping or Angel Funding? (And Why I Don't Regret Partnering With Penelope Trunk)

Fantastic post. Thanks for sharing.

I think one thing you left off (which is in your defense) is that Brazen had no way of predicting the failing economy and credit crunch, and that hit happened to coincide with needing to raise a second round of funding shortly after. I don't think you can or should blame yourself/P.

One of the things we forget in business is that decisions should be judged by the process, not the outcome. A decision made with good process that had a bad outcome is a bad break, but a decision made with a bad process and good outcome is dumb luck.

The question is which would you rather have? Okay, so of course right now you would rather have the good outcome even if it was dumb luck, but we all know the right answer is really the decision made with a good process, because it demonstrates competency.

Ryan,
I have recently published a book that is targeted to Generation Y and so I've been commenting on some of the posts on Brazen Careerist. I've only become aware of the website in recent weeks but I think it's an awesome website, and that's coming from a 50 year old! I was disheartened to read your article about the financial difficulties the company is having. Both Brazen Careerist and Employee Evolution provide a great service that my generation never had when we first started out in the workplace-the opportunity to effortlessly share ideas among people with similar interests. All I can say is just hang in there and be proud of what you have accomplished-and you have accomplished a lot.

I love that this is a transparent thing Ryan. Good for you and Penelope. Best of luck!

Hey guys, thanks for the comments!

@Monica good point, of course we had no way to predict the recession. However, Penelope was in a similar situation with her last start-up. They turned down an acquisition and the the bubble burst. Her experience has definitely given us a leg up in knowing what to do now.

@Andy Thanks for the well wishes, I'm glad you like the site(s). I have total confidence that we are going to continue and eventually thrive, even if it takes longer than anticipated. We just need to figure out some innovative ways to make it happen now!

@JR Thanks! Claiming to be transparent and actually being transparent are very different. Most companies dont talk about funding, and probably for good reason, but our culture is transparency so we have to practice it. Hopefully when we are 50 people strong we can say the same thing

Ryan,

Great break down of everything to consider between bootstrapping and funding. I have been following brazen since Dan moved up there to join after graduation. You have done some great things and have had some fantastic growth, but the economy has just given you a slap. Your idea is valid and you have proven the growth. Now just refine and focus everyone on the benefits that can give your clients a step up from their competition during a down economy.

Just wanted to wish you luck and stay strong!

Hey Ryan,

As a Brazen writer, I naturally have a vested interest in seeing Brazen succeed. As an outsider to the particulars of BC's financial woes but an insider to partnering with individuals similarly re-tooling their business models to adapt to the realities of the economy, I can't emphasize enough looking at how to bring in streams of revenue right now. BC has a solid fan base. As you are cutting back particular components of BC, how might you incorporate 1 or 2 new lean and mean ones that can generate revenue?

What do readers of BC need that only you can provide?

Feel free to be in touch if you are interested in chatting more about this.

Ryan,

Your business is toast. You need to wake up to reality. The economy is contracting harder than it has in decades and you should have seen this coming AT LEAST 12 months ago (the writing was all over the wall if you paid attention to the economics at all), and the "service" your business provides is really more of a luxury than a necessity. Your focus is on how companies can attract and get in touch with Gen Yers. I got news for you, Gen Yers are no longer in the driver's seat. They are going to have to suck it up and find whatever job is willing to hire them at this point. All the fluffy stuff goes out the window. To give you an example, we have openings at our company and students are lining up out the door to get in. We have NO time to waste with students looking for perks or taylor maid career plans that fit their every desire. If a candidate is not totally on board with our company and what we have to offer, they are discarded without hesitation. There is probably going to be a new label put on graduating students over the next 5 years, and their characteristis will not resemble Gen Yers at all.

It might be time for you to grow up and get a real job – at least you had a good run for a little while. I worry that you are not picking up the necessary skills to survive in the future job market. You will need concrete, marketable skills. Being a co-owner of a VERY small shop that basically writes articles and makes appearances will not get a job at very many companies. If you can't bone up and get some marketable skills, than your only alternative is to survive this depression (yes, this is not just a recession – if you can't tell this, you really aren't paying attention) as a small business owner. If you are to do this, you need to seriously re-evaluate not only your business plan, but the product you are trying to sell. What is your current product worth in a depression?

Hey Jon,

You're right, the economy is in shambles, and people are more willing to take a bad job now than they were. But when the recession is over, and people again have their choice of jobs, I guarantee they will leave a bad job in a second.

The answer is not to say that employees need to suck it up and work in a bad environment. Instead, the companies who will survive are catering to what their top performers want, and laying off the sub-par performers. Businesses live and die based on employee performance, and employees perform best when they enjoy what they are doing.

Gen Y has gotten a bad rap in the media the past few years, but the truth is that we are a generation of people who want to work hard, help others and do great things. When we start being seen as a generation of people trying to make a difference by the media, the only real difference will be in how we're portrayed.

I hate to imagine whats going to happen to the companies who think like this when the economy picks up and their top performers hit the road.

Thanks for the comment.

-Ryan

Ryan,

I realize that companies will pay the price if they don't treat their employees like a valued asset. But the reality is, we are all commodities in the business world and companies are not going the extra mile these days to attract and retain even top talent because they do not have to (and they don't have the money!!). It's simple supply and demand – capitalism is brutal but efficient.

But this concept was not really even my point. My point was, whether you would have bootstrapped or not, YOUR company is in trouble because it is not providing a valuable service in the current economy. Companies don't want your advise about how to hire and retain Gen Yers, and the advice you need to be giving to Gen Yers is, suck it up and get a stable job. There is no time for fairy tales and fluffy stuff right now (unless you like being unemployed).

My other point is that understanding Gen Yers will become less important as a new generational wave comes pooring in with a completely different work style and label than Gen Yers. Essentially, Gen Yers (just like Gen Xers and all those before them) will become irrelavant (you yourself are probably coming up on the big 30 here soon). You have ridden the Gen Y wave for as long as you can – it's time to jump ship. This will be the last time I visit your site, because honestly, there really isn't anything I can gain anymore from reading these posts.

Another comment on transparency – I saw you guys on 20/20 the other night. That is brilliant (sarcasm applied) showing each other your salaries. Sounds like you had to give a pay reduction to an employee that left shortly thereafter – sounds like a good retention strategy. BTW, if I were the rest of you, I'd be pretty upset that you didn't get a raise out of deal since you seemed to be severely under paid compared to the girl that left. It's funny how you are all learning the hard way instead of not just trusting so many tried and true business models (maybe that's the Gen Yer mantra). Go research Jack Welsh and it will save you years of banging you head against the wall trying to re-invent the wheel. Your companies immaturity is amazing to say the least. Please don't try arguing that you know the true secret to success and that all us fuddy duddys are wrong – the proof is in the pudding. As much as it hurts, your business WILL fail.

@Jon — There's an Apple ad that's now famous and has a bunch of great quotes, one of my favorite being: "Some may see them as the crazy ones, but we see genius. Because the people crazy enough to think they can change the world…are the ones that do."

I think what's great about Brazen is that they take a lot of risks that might seem crazy to others, but they do it they believe they are making an impact. And the only way to create any kind of change is if you — and your company — are willing to do something different, innovative, and off the beaten path, rather than making your decisions based on fear.

Thanks, Nisha! Maybe we are a little less than normal, but you're right we all think we are making an impact and we're doing what we're doing because it helps people, educates people and its fun. I always appreciate a little support

You know, this reminds me of walk-on college football try outs. For every 1000 that try to walk on, there is 1 that actually makes it as a starter on the team. But the story of the 1 keeps the 1000 coming for years and years.

I love successful walk-ons. I love the story of Steve Jobs. But the reason he was successful was not because he just wanted to cut against the grain, and it was "fun." Steve Jobs IS a genious. Bill Gates IS a genious. Not just in their management style, but these people found a badly sought after commodity – the personal computer. And although they did not finish college (oh, the poor masses that try to follow them), they were all brilliant educated and EXTREMELY technically savvy.

My point is not about the dreamers and those making a difference in the world. My point is that your (Ryan Healy's) product is not in demand. That is why you are struggling financially. I already said it, you need to fix your business model, but more importantly, you need to change your product. Sometimes being cutting edge takes enough humility to know when you have made a mistake (I'm sure you have felt the burn from all your transperency issues) and adapt accordingly. Apple has survived because of its extreme flexibility, not their stubbornness to continue down the wrong path and failure to learn from mistakes.

Ryan, you are obvioulsy a very bright, motivated individual. You will do well in life if you don't let set-backs get you down. I just feel strongly that you might need to cut bait on the Gen Y thing and find a new angle. Find a product that people truely want and need. Not some fluffy website on a generational label fad that will leave as soon as it came. You have done well thus far, but you've milked the topic for all it was worth.

Ryan,

I just read this post and comments today thanks to the recent comments section of BC. Very good post explaining differences between bootstrapping and angel funding and your experiences. Paraphrasing Jon above, I think you will do well in life if you don't let people like Jon get you down. I know he doesn't understand BC's business model. What I question is his motive (lack of transparency) for continually posting here with a negative slant. Add to that he says – "This will be the last time I visit your site, because honestly, there really isn't anything I can gain anymore from reading these posts." – which didn't happen as he returned with another comment. However I will agree with his assessment that flexibility and adaptation to change (especially in this economic climate) is critical. I see BC is doing that though. So this gives me an opportunity to give you guys at BC kudos for the changes made at the BC site today that make it more user friendly. I think the way to market BC today in this economic crisis is to explain to companies how much further their brand will be ahead of everybody else in the future once the economy is on the upswing if they use your services. I would emphasize that most companies can look good in the good times but it's the great companies that will stand out in difficult times. I can't give you specific advice but I think your revenue streams should be diverse to give your product(s) the most visibility.

Mark

Hi Mark

Thanks for the comments and the well wishes. I've been blogging long enough to know when I should listen to people and when I shouldn't, so Jon doesn't bother me

I really appreciate your comments about Brazen and how we are pushing forward. We were on one path and then, out of nowhere, we had no money and had to completely reinvent ourselves or go under. So we're trying whatever tweaks and new ideas we can to see what works. I agree that branding now will go a long way when the economy is good and a lot of companies understand this as well. Hopefully they will want to work with us!

Again, thanks for the comments and I'm glad you like the new Brazen features

-Ryan