diverge
I talked to two local CEOs in the same business, selling meals that customers assemble themselves, who are taking opposite routes. Their stories, in this month’s Informer, present a rare opportunity to consider a common entrepreneurial debate.
Which is better: bootstrapping your company — that is, scrounging enough money to finance growth yourself without adding outside investors, or fund-raising substantial amounts from venture capital firms or private investors?
First, the bootstrappers. Jason Hake co-owns Sociale Gourmet with his wife, Lisa. He was cagey when I asked how they were funding their expansion. He likes to hold his financial cards close to the chest, he said — which to a veteran business journalist like myself is code for: we’re bootstrapping.
Then he said he has a small group of investors. I said, “Oh, you have angel investors?” Finally, it came out: “Yes, her name’s Lisa, and his name’s Jason,” he said. “We’ve cashed in our 401(k)s.”
Not that there’s anything wrong with that. Hake needn’t be defensive, because the bootstrapping route is a time-honored tradition among owners who value their independence above all else. “We believe in small business,” Hake said, indicating his preference for this way of life.
Then I asked him for their titles, and he confirmed it. “Titles are so corporate, and that’s what we left.”
Now, the fund-raisers. Darcy Olson and Ruth Lundquist co-own Let’s Dish! and just raised $4 million to fund a nationwide rollout of franchises and corporate-owned stores.
They brought on a new president, Allan Hickok, a big name in Wall Street/restaurant circles. They now spend a lot of their time forming a new board, talking to their private investors, and otherwise getting ready for the big time, fast.
And they’re thrilled. “We were so energized about the whole idea” of their company, Olson says, started a mere two years ago. “What surprised us was how fast it went.”
How will their stories turn out? It seems as though Let’s Dish! will enjoy a future more grand and glorious than Sociale’s, at least it seems so to people conditioned to believe that getting bigger faster is always better.
But of course that’s not a sure thing; there are plenty of tales about supersonic growth that end bitterly and abruptly. And even if so, even if Let’s Dish! is a wildly successful national brand in five years, Sociale’s future may be grand enough to satisfy its two owners. After all, they’ll only have to divvy up that future among two people.
As with most business owners’ stories, won’t it be interesting to find out what happens?
— Beth Ewen
editor and co-founder
bewen@upsizemag.com
