Why Being Broke Makes You Smarter

My own data on billion-dollar companies shows that more than 90 percent were venture backed. The rest either were bootstrapped, meaning they did not raise VC funding and grew on their modest profits in the initial years, or were self-financed through founders who had the means to invest in their own companies.

In downturns, good salaried jobs are hard to find, because nobody is quitting. So good people (and cheap assets) are plentiful. The absence of cheap, easy capital means the concept has to work from day one. Founders in downturns imprint a more disciplined DNA on the company’s culture—they have no choice. Clients and consumers are also more open to

those capital needs could create a form of…

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A venture capitalist in today’s economy can fund a company like Instagram, which was eventually sold for a billion dollars, while employing only thirteen people.