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Bridgepath.com maps its
future with bootstrapping
By Jenny
C. McCune • Bankrate.com
 Bridgepath.com
develops Web-based applications for recruitment
and staffing firms. It's a nifty and soon-to-be profitable niche,
but back when the San Francisco company was started two years ago,
the first thing its founders agreed upon was to finance it through
bootstrapping.
"We are a young management team,
so we could take this road," explains co-founder and CEO Auren Hoffman.
Besides, the startup never could have gotten a bank loan or venture
capital funding just starting out, Hoffman says.
The company's bootstrapping began with its offices.
Bridgepath.com furnished its offices for $50 or less by having employees
bring in spare furniture. They even took some abandoned furniture
they found on the streets of San Francisco and used it in their
offices.
Workers
get options
BridgePath also offered a pay-a-little-now, pay-more-later form
of employee compensation. "We found employees that believed in our
corprorate mission and were willing to take a pay cut in exchange
for stock options," Hoffman says. The theory: If the business takes
off, these stock options will be worth plenty and will make up for
the measly wages paid in the beginning days of BridgePath.com.
The startup also asked its vendors to defer
their fees. The company's attorney agreed to be paid later, rather
than immediately, for his services.
Bridgepath.com also bartered with its suppliers
to save precious cash. It "paid" its accountant by helping design
and run his Web site. "In exchange for services, we'd install computers
or help them hook up to the Internet," Hoffman says.
A
commitment to thrift
In general, the company practiced penny-pinching that would
have made a Depression-era mom proud. It constantly negotiated and
attempted to lower fees. For example, when it came to picking a
long-distance phone vendor, the company negotiated with four different
companies to get the best rate. "That's saved us thousands of dollars
over our first year," Hoffman says.
While being frugal is a great discipline, the
belt-tightening at BridgePath.com has loosened somewhat. After a
year of bootstrapping, the company was able to raise a little less
than $1 million in venture capital. Currently, it's undergoing a
second round.
While the Internet startup hasn't broken into
the black, it is on track with its business plan and should be profitable
within a year, Hoffman says. For now, BridgePath.com and its 18
employees are doing just fine -- in part because the company's founders
said "yes" to bootstrapping.
Jenny C. McCune is a freelance
writer based in Montana
-- Posted: Nov. 1, 1999
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