Bootstrapping: Doing More With Less?the title of the book says it all. Sramana Mitra?s series, Entrepreneur Journeys, is about start-up entrepreneurs who begin their businesses with the little savings they have. Mitra, in the second volume has talked about a few myths. While she has argued venture capital and bootstrapping are not mutually exclusive, she advises mentor capital to venture capital. Large companies rely on venture capital but there are many small companies that are coming up and venture capital is not a sustainable model for them. In her yet-to-be released book the coming year, Vision India 2020, 45 business ideas are discussed. Moumita Chakrabarti gets an insight on the mentor capital during a telepresence with her. Excerpts:

Why do you prefer bootstrapping to venture capital (VC)?

Bootstrapping is starting a business with whatever savings you have while VC is the money that you raise for building a business. But raising a huge capital for building is not a good idea. For instance, I fell into the trap of VC funding. In the 90?s when I started, VC funding was flooding in. And the whole thing was about funding, everybody was talking about how much they have raised. But at the end one loses control of one?s own company. I myself lost control of my company. VC is not the end game as perceived by the US media, rather it is just a tool of success. And it would be great if the Indian media could drive this home.

Today, there are 10,000 entrepreneurs who are working in the technology and the focus is on raising money. We have to stop this and explain to them what they are gaining and what is it that they are losing from VC. VC is set up for very large market opportunity that don?t come everyday. Google doesn?t show up every day. Today, many small ideas are popping up. We need to equip them in order to build their businesses.

Do you think a recessionary spell is a good time to start a business?

Entrepreneurship goes up during recession. When a person has a job and gets the salary credited , no one thinks of getting into business. But it becomes an open option when one has nothing inhand. There are a lot of studies available on the subject.

As funding is a crucial factor, is it possible to do away with VC completely?

There are a few myths we need to do away with. First, one cannot build a large company by bootstrapping. Second, that VC and bootstrapping are mutually exclusive. They are not. To build equities, one should do bootstrapping in the earlier stage and later raise VC. By then one would have got some control over his company and the value of the company would also get higher.

What are the things that would help the first-time entrepreneurs?

It is necessary to create role models and educate them. I do not want sophisticated role models but those who have built block by block. Entrepreneurship is not about overnight success or one of pure luck. It is not something that I can give you, something that you can moral after. In Bootstrapping…, I have brought in real stories where people have built things block by block.

Next is education. The business schools in America squarely educate students about VC. Hardly anyone teaches bootstrapping. Bootstrappers need technical knowhow and encouragement. The entire knowledge in Silicon Valley is unfortunately in the form of tribal knowledge. It has not been captured any portable format so that people in Chennai, Hyderabad or Mumbai can access it, which I?ve tried to mend through books and blogs. One should depend more on mentor capital than VC.

Comment on young Indian entrepreneurs.

In 1995 when I was in Kolkata, outsourcing business was the only business eco-system. But things are changing. This year, at IIT Kharagpur, I was delighted as the IITians were eager to know more about bootstrapping. The under 30 population is keen on entrepreneurship. In India, entrepreneurship is happening only in pockets?Mumbai, in some pockets of Delhi, Hyderabad?it is still metro driven and hasn?t really infiltrated into the countryside.