Bootstrap or raise venture capital? Start with the milestone

Write down the customer or technical result you need, the work required, and the cash cost of reaching it. Distinguish costs that happen before the first receipt from costs that grow with customer revenue.

Compare at least two ways of reaching that milestone. A smaller scope, a paid pilot, a services engagement or external capital each changes the work and the obligations. The point is to make the tradeoff explicit, not to assume that one path is virtuous.

An equity percentage does not describe every term of a financing. Board rights, option pools and liquidation preferences can affect decisions and payouts. A headline valuation is not money the founder can spend.

The VC tool models a simplified 1x non-participating preference: investors take the better of the investment preference or their converted ownership share, not both. Its two-party payout model does not separately allocate proceeds to employees or other share classes. Actual terms require their own cap-table analysis.

Keep the assumptions beside each result: revenue growth, margins, financing rounds, founder compensation, timing and the eventual buyer or exit. Change one assumption at a time so you can see what drives the apparent advantage.

Record the reason for choosing a path and what evidence would reopen the decision. If the plan relies on fundraising, include a version in which the money arrives later or does not arrive. Neither a successful raise nor an attractive simulated exit establishes that the underlying business works.