Bootstrap Funds: Post-Traction Investments, Access to Experts, Islamic Finance

In order to survive, VC funds rely on one or more companies to return the fund.

VC funds are built on the premise that most investments will fail or break even. This is a feature not a bug. But VC doesn’t work for most companies.

Venture capital funds provide capital and guidance. But this comes with billion-dollar expectations.

Bootstrap funds are designed for less extreme outcomes. They tend to invest post-traction and operate in niche markets.

This model may work when major network or scale effects are at play. These are powerful forces that blunt competition and protect margins. Think Google, Facebook and Uber.

Founders of niche businesses struggle to find smart, aligned advisor networks.