How bootstrapping your company can lead to big business
Nacho De Marco was a technical project manager based in Buenos Aires, Argentina, when a chance opportunity changed his life.
It was 2009, and an acquaintance reached out because they needed a team of software engineers for a project. De Marco contacted his friend, Paul Azorin, who previously did similar freelance work, and the two decided to take on the project.
With that decision, BairesDev was born.
“It’s not that we had in mind that we were going to become entrepreneurs,” De Marco said. “It was more of a coincidence than something we knew since we were kids.”
The two co-founded the company and continued taking on side projects through 2010 when they left their full-time roles to devote their attention to BairesDev.
Today, BairesDev is a leading nearshore software development and staff augmentation business. The company employs more than 4,000 professionals throughout 40+ countries — 90% of which are based in Latin America. BairesDev’s annual recurring revenue in 2022 was $338 million, a 71% increase from the previous year.
What makes BairesDev’s ascension more remarkable is the company was fully bootstrapped with no external funding. De Marco, who is CEO, talked about that decision, the pros and cons of bootstrapping, and whether he would make the same decision if he could do it over again.
‘Provide opportunities for talented people’
Vistage: In an interview with TechCrunch, you said “We didn’t just want to build a company — we wanted to provide opportunities for talented people, many of whom come from remote areas in Latin America.” Why was that important?
Nacho De Marco: I’m originally from Argentina, and I like my home country for a number of reasons, but not necessarily for having a lot of opportunities. The reality is there are not a lot of quality jobs.
We figured out a way in which we could solve problems for U.S. companies that have more pressure to compete in a global market. We could solve their problems and help them build software faster and better. At the same time, we kind of solved a bit of a problem in Latin America by giving access to quality jobs.
V: Why did you decide that bootstrapping your company was the right decision as opposed to pursuing venture capital or private equity money?
NDM: VCs and private equity firms at the time wouldn’t touch Latin America. There were a few exceptions, but for the most part, it was impossible to get any capital. Raising money at the time was simply not going to happen. We also didn’t have any connections in the U.S., so we used personal funds. We invested about $10,000-$20,000, which was probably about 50% of our overall net worth at the time.
Bootstrapping 101
V: What are some benefits of bootstrapping your company?
NDM: I think the pros have a lot to do with efficiency. The only boss you have are your clients, so you have to serve your clients really well. If you do, good things happen, and there’s no conflict of interest that may arise when you have investors. If you focus on your clients and you get them a good service or a good product, and you focus on what matters the most, you’ll make it out alive.
V: What are some downsides of bootstrapping your company?
NDM: When you have raised capital you can sometimes pivot, and it’s reasonable for that to happen in an early-stage company. You may have 18 months of runway and you can still survive, even if you produce poor results, which is not a luxury bootstrapped companies have when they start.
Another advantage of raising capital is sometimes those companies will have contacts. They’ll get you access to experts or advice that you may not be able to get anywhere else. Finding that help early on in your career as an entrepreneur is not easy.
V: Were there early concerns that the company wouldn’t succeed?
NDM: Absolutely! That was the reason we waited almost two years to quit our full-time jobs. That first year, I think I made about $3,000 in the entire year — definitely not very lucrative.
Any external factor could have destroyed us. We started right after the ‘Great Recession’ of 2008, and there were still companies not doing well. If some of our clients went bankrupt or couldn’t pay our invoices, we would have probably disappeared by now. There was a little bit of luck involved.
Solving problems at home and abroad
V: Looking back at the success of the company, what are you proudest of?
NDM: From a business point of view, BairesDev is a business that actually solves a problem, not just for the Latin American community by giving them quality jobs, but for American companies. On the personal side, me and Paul are still friends. We still love each other, and we’re still having fun.
V: If you could do it all over again, would you bootstrap your company?
NDM: In the situation where I was, I was coming from a middle-class family in Argentina, which was not particularly the safest place. The economy changes all the time, and sometimes companies go bankrupt, even if they did everything right. We got lucky. One of those swings in the economy could happen at any time, and we could have been bankrupt. So from a safety perspective, I would probably not have bootstrapped. I think I would have bootstrapped if I would’ve been in the U.S., where there’s more stability.
Paying it forward
V: You’ve had this incredible bootstrapping success story, so why was it important for you to launch BDev Ventures, a VC investment firm?
NDM: My main problem when I started the company was that I needed to get clients. Imagine a guy in Latin America trying to get clients in the U.S. with absolutely no network. I don’t think many VCs will hand clients to you, but that’s exactly our thesis with BDev Ventures and what we do. Having someone that will give you cash, and on top of that, give you clients and revenue, is something I believe is super valuable. If we had had what BDev Ventures now offers at the time, we would’ve taken it without a doubt.
V: What advice would you give an entrepreneur considering bootstrapping?
NDM: You’ve got to be really focused on making sure there is a market fit. Bootstrapping has a lot to do with having one single boss, which is your client. As long as you keep listening to them and understanding what they like and what they don’t, I think you’re going to do a good job.