Question
I started and bootstrapped my second tech startup 8 years ago. We saw constant growth and reached just under 2M in sales until 2012 when we were hit by some challenges out of our control, including a bogus patent troll suit (which was eventually dismissed). Being bootstrapped, we just didn't have too much of a safety net in place to deal with these issues. While I have been able to hold things together from then to now, it has been more 'survival mode' than anything else. I have tried a LOT of things, but it's all been on the cheap. Advisors have told me to cut back which I have.
Since then it has been a constant struggle and sales have been heading downward. I am pretty much alone as I have no investors.
While I still think our company has a lot of potential, I have not yet been able to make a rebound happen. Our direct competitors are funded companies, and it's tough to go up against them without any funding and in a defensive position. The investor types I talk to have always communicated that we make too much for an angel and not enough for a VC. I have cut back pretty much all I can (we have always been pretty lean anyway). I have what I think are some great and innovative ideas, but I don't feel I have the time and funding to make them happen.
On my own, I am feeling less and less we will be able to bounce back. I have no idea what I will do if I have to shut things down. I have literally poured my life into my business to keep it going, so stakes are incredibly high for me and my family.
I want to be pro-active and make sure I have things in order so that if it gets to the point where it needs to be shut down, I am not scrambling to find a plan B. Additionally, I am not even sure how to shut down a business of this magnitude with many nuts and bolts. Does it have to go bankrupt? Do you just shut down the website? Has anyone else gone through something similar?
Answer
Based on your position it doesn't sound like you are confident in your companies ability to utilize it's competitive advantage to take market share from the funded companies you seem to be up against. If I were in your shoes I would be proactively considering all of my options and digging deep as to what they really require. If you want to continue you need at least enough funding to be able to properly market and sell your established product to take market share. You could "shut down" as you mention, but with the IP you have probably already developed, why not contact some of your more admired competitors and ask if they are interested in buyout including taking you on in a role that they feel could add equitable value to their positions?
I would be happy to do a free call to understand your specific product/service and position better to dice it up a bit more. Winding down the company would be a nightmare, I'd avoid that if at all possible.
