Bootstrapping: Great Companies Started with Less than a Thousand Dollars

CEOs from 11 different companies share tips and suggestions on how to fund a start-up with under $1,000.

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How 11 savvy but cash-strapped founders substituted imagination, know-how, and effort for capital

What does it take to start a really successful business? for many people the answer to that question is simple: plenty of capital. In this issue, Inc. showcases a contingent of company builders who started their businesses with notably distinct -- and in at least one case, debt-ridden -- portfolios. Money was the one resource they lacked. In the formative years, their now-flourishing enterprises relied on an abundance of assets more inventive than monetary. Today their ingenuity is our inspiration.

Collegiate Publisher
Campus Concepts · Founded: 1985 · Start-up capital: $48 1994 revenues: $2.5 million · 1995 projected revenues: $4.5 million

As a student at Hobart College, in upstate New York, Ian Leopold envisioned an unofficial student guide to the Hobart experience, loaded with practical information about sports, student life, and off-campus attractions, as well as key phone numbers and a calendar of events. He'd need enough advertising, Leopold reckoned, to distribute his book free. He fleshed out a business plan as his independent-study project. And even though his professor flunked him, Leopold persevered.

He founded Campus Concepts, investing $32 in order forms and business cards -- generic ones -- so that he and his ad-sales recruits could pencil in their names. With the $16 left over, he opened a checking account. Then Leopold and his sales force -- students on commission -- pitched retailers. "It cost $50 or $100 to advertise in the book," he recalls. "When I got cash I bought an answering machine, and it started to feel like a business."

Once the editorial package was complete, he approached a printing company. "They wanted $1,000, and they didn't think I had the money," Leopold says, still relishing the moment. "But I did. I'd already sold the ads." The first annual Unofficial Student Guide to Hobart College turned a 50% profit on $3,000 in revenues.

In 1986, after graduation, Leopold kept the company alive by hiring someone to handle subsequent editions while he got his M.B.A. in finance and strategic planning at the Kellogg Graduate School of Management. During the next two years, while he worked for a Cleveland company, he continued to nurture Campus Concepts on the side, transplanting the Hobart model to other colleges and universities and hiring their students to write copy and peddle ads. Sales had expanded to $75,000 by the end of 1987. Rapid growth brought cash-flow crunches, of course, and in classic bootstrapping style Leopold pulled out his credit cards. "It wasn't unusual for me to go from bank to bank and literally get $10,000 in cash," he says. "If it weren't for credit cards, I wouldn't be in business."

By 1990 revenues had reached $250,000, and Leopold scouted around for a low-cost headquarters location. Mindful of ambience, he selected Baltimore. "It's got a nice airport and good sailing," he says. "And a kid can live decently here on $30,000." These days the company publishes its freebie unofficial student guides for 70 colleges in 35 cities, with a total circulation of one million. It boasts 4,000 advertisers overall -- from local pizza joints to the likes of Sony, Gillette, IBM, and Colgate. "It shows," he says, "what you can do with $48 when you work hard." -- Jay Finegan

Corporate Cost Cutters
Combined Resource Technology (CRT) · Founded: 1986 Start-up capital: -$14 million 1994 revenues: $2 million

Fourteen million dollars in the hole. Such was Darwyn Williams's sorry situation in 1986, when he and partner Chris Moran, a former builder, launched Combined Resource Technology. Williams's real estate development company in Baton Rouge had been "body-slammed," he says, when an oil- and gas-price crash rocked the Louisiana economy. He was stuck with an overleveraged shopping center and apartment buildings plunging in value while he owed some $14 million to banks. "It was pretty damn serious," Williams recalls. "We were without jobs or ways to make money. And we had families."

The real estate collapse contained the seeds of their salvation. "Some properties weren't worth half what they'd been worth six months earlier," Williams explains. "But the tax assessors hadn't dropped their valuations, as required." The partners' plan: peruse tax rolls, identify overassessed properties, contact the owners, and get the taxes reduced. Their fee: half the first five years' savings. Their initial client was a printer, for whom they saved $7,000. And instead of cash they accepted $3,500 worth of brochures, letterhead stationery, and business cards -- an adroit marketing move.

"We looked quite professional on paper," says Williams, "but our office was a tiny room in a farm-equipment warehouse owned by my partner's father. It looked like a little bookie joint." They called it "Suite 100" and answered the phone, "Executive offices."

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