“When it comes to doing your own startup, there is nothing like bootstrapping – using your own money to start and grow your business.” Megha was speaking to a startup group – Ideas and the Mind. People with existing startups or planning to start on their own were members of this group.

“I still remember 10 years ago when I had this idea for my product. I was taken over by excitement. I wanted to leave my job immediately and start working on it. Thank God a good friend shared some sane advice. I decided to first create my own fund for my startup before calling it quits.” Her voice was excited.

“But you could have taken a loan or funding.” One of the members asked.

“Yes, I could have but somewhere I felt that I would be putting myself in another job by doing this. I would not be working purely for myself. I needed that flexibility and time to patiently build my business. With money from loans or investors, I believe, it becomes a little difficult. It is a personal choice but that is the way I like it. Thankfully it has worked out.”

“So, how did you build your startup fund? Any ideas that you can share which I can use too.?” This was a question from another member of the group.

“Sure. I will try to be as specific as I can.

I had realised that I will need at least 5 years to build this fund, enough to get me through the first couple of years in the startup grind. I could have simply chosen conventional saving products but that would have not been very effective.

I thought about stocks too but managing a stock portfolio is not easy, especially when my personal interests lie elsewhere. Another friend, who manages my investments now, suggested mutual funds to me.

I was aware about mutual funds and after further discussions with him, it looked like the right kind of product for me. With my friends’ advice, I chose a balanced scheme offered by mutual funds, which invests in a combination of equity and debt.

On the one side, I continued with my job and invested as much as possible in this fund. On the other side, I kept working on and refining my product. After about 4 years, I realised that my product design was quite ready to go to market. Quite coincidentally, my fund size too was at a level where I could now quit my job and start on my own.

And so I did it.

I can’t describe the feeling of starting on your own with your own funds.”

“Can you give us the contact of your friend who helped you with the investments?” asked an excited member. “I also want to build a fund for my startup.”

“Do you want to be surprised?” Megha had a giggle in her voice. “That friend is actually a Systematic Investment Plan which is nothing but investing a pre decided small amount of money on a pre-set date every month into your specific chosen mutual fund scheme. 
It will help bring the much needed discipline to your investments. Also, it’s quite easy to start an SIP.”

“Thank you Megha. You have made bootstrapping look cool. Thanks again for the ideas today.” The organizer announced the closure of the day’s meetup. 

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.