Bootstrapping a startup is one of the most common ways to push through to profitability: reduce costs, keep it simple and use lean methodology to push out a minimum viable product for the least amount of money upfront.
Rather than taking investment, this method provides founders more flexibility and scrappiness, as there are fewer hands at the helm.
However, at some point, every startup either needs cash (revenue or investment) to translate traction into growth, or simply decides that bootstrapping is not providing sufficient resources to fully engage the concept and deliver the product – and either raises funds or joins the napalm yard in the sky.
It’s never easy, and those startups in the travel industry have industry-specific challenges: stiff competition from well-funded companies, a legacy system that doesn’t always support innovation, and a fragmented industry that spans the world’s cultures, technologies, habits and needs.
The VCs at General Catalyst are surely going to be causing a stir among the battle-weary: a $250,000 bridge loan will be offered to the travel startup with the most potential at the Travel Innovation Summit next month in Arizona, USA.
Dubbed the General Catalyst Award for Travel Innovation, the award comes in the form of a bridge loan that will be converted to equity when the winning company raises their next round.
Out of the 30 Travel Innovation Summit presenters, only companies that are under 3 years old who have raised less than $1 million and are currently seeking funding are eligible.
The bridge loan will be awarded to the company with the highest numerical score, from either the startup or emerging category.
Companies currently in General Catalyst’s portfolio are not eligible and will be excluded from the selection process.
This award will surely be eagerly welcomed by the presenting companies, and offers a significant opportunity for one company to take a win out of the Travel Innovation Summit and ride it to the next level of growth. Should this award be carried through to next year, expect the competition for a slot at the Summit to be fiercer than ever.
NB: Buckets o’ cash image from Shutterstock
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About Nick Vivion
Did General Catalyst reveal any details as to how this bridge loan would be structured? Depending on the structure, this could be a great win or a bad deal for the winning startup.
@travis Yes, they did provide details. it is a convertible loan with no discount, for start ups that raised less than 1mm.
@raj – agreed. Starts ups should not be expected to pay for presenting.
And yes, it might not be a good deal for some startups – it really just depends on the founders and what their strategy/view on accepting the funding might be. It will be interested to see how this pans out!
A bootstrapped startup would have a tough time justifying the 15K fees for participation in the Summit.. I think an Innovation summit should a be a lot more supportive in showcasing innovative technologies/companies in their early stage.
A valid point, and it’s essential that the industry continue to support innovation through free or extremely low-cost presentation avenues. You’ll notice that there are some more established companies presenting – perhaps they could “adopt a startup” and support a fellow startup in their attendance.
Alas, I am always looking for the silver lining in everything!
N
Yeah I did notice more established companies presenting. I like what you guys (Tnooz) is doing in showcasing companies on the site and with the THack efforts. We need more of this to really push innovation in the hotel and travel space. “Adopting a startup” for the event would be awesome but not as likely…hopefully oneday
Great post!
Raj
Perhaps there’s a good side project there – “adopt a startup” and get them to the conference they need to be at in their quest for the next level. Sounds fun!
N
What is the interest rate on this loan? How is it structured?