Low living costs + high relative wages for a western-educated human being in South East Asia = my short-term boot-strapping strategy. See below-the-fold for details of that.
First, the past:
* I bootstrapped my first venture, called Ethical Style, when I was 20 and going to university (5 years ago). The idea was to support independent artists abroad by marketing (for profit) their products in N. America. I sold on- and off-line and made a little money, nothing big. I stopped working on it after a year, when I got accepted into a program that let me travel the world to promote Canadian businesses and meet "important" people (stayed there until I saw enough government fraud to make me sick).
-- Spending my own money on my first business, which I really believed in, felt natural, and I liked the idea of growing 'with' my business, one challenge at a time.
The only reason I'd have rather had other people's money for that business, is because it was my first business venture, and I wish I'd sought more advice from people who knew what they were doing. Raising money would have entailed this sort of learning and possible mentorship.
-- An important aside: being in school was a big distraction and took away from the necessity of commitment to what I was doing. Had I really depended on this company as a full-time endeavor, I think I'd have kept at it longer and learned more.
-- The money I spent on this company was earned in a damned-hard-assed way: tree planting in the mountains of British Columbia. Camping out on the side of a mountain planting 2000-odd trees a day in the thick of bugs and blood and tendonitis and rain and snow was by far the most challenging thing I'd ever done, and I failed more at it than I'd failed at anything else in my life before I finally learned how to be successful 2/3 of the way in to the season. So there was a lot of sweat in that money I spent.
* In my last venture, we had 4 equal partners with a 'consensus' decision-making structure. Maybe this would have worked if it wasn't complicated by dramatically differential personal knowledge of each other's working styles, morals, and skills -- in our case we had to go through the difficult process of removing one founder part-way through, and then I burnt out from stress after living alone inside the product development office I started in China for half a year.
-- In general I don't think my personality was strong enough yet to deal with so many issues related to working with older people related by family, especially when most of our communication was on the phone or email (we'd never actually worked closely together, ever, before two of us -- then, later, one of us -- came to China to do the bulk of our product development work.)
-- This company is still going without me, and all relationships remained intact after I left, thank goodness
-- Taking money as a young, eager person, I wasn't forceful enough in putting my own point of view and thinking independently. I too easily believed what the older investor said, too easily gave them the benefit of the doubt. I like to think I'm a lot more skeptical now. So the psychological effects of taking money need to be included in the discussion. I like the idea of bootstrapping because of the independence that it fosters in my own psychological development -- but I think some investor situations would also help, rather than hinder this.
* I don't perceive capital as being all that scarce. If I have a good idea that convinces me, then I am relatively confident that I will be able to find funding to match the merit of my endeavor.
-- Finding good people to provide that funding along with healthy relationship and support, however, is extremely valuable in my books and not guaranteed or simple or straightforward (enter: luck, kindness, etc.).
-- I think this attitude helps me, because I don't feel like I'm not taking capital because I'm not "good enough", eg/ it doesn't hit me in the ego and scare me out of having confidence.
--------- the present / future ---------- (story-telling time!)
While I am currently waiting rather passively for the twin progenitors of startups (idea + energy) to consummate their relationship in my life again (I'm still in the pre-conception stage of my third venture) I'm replying to this anyway because of (1) self-perceived inevitability of my starting a new venture in the next 6-12 months, and (2) my decided preference to bootstrap, after a rough experience with a push-forward-faster-than-you-can-comprehend-your-own-world, aggressive-angel model of my last startup.
A few months ago, my own burnout (http://news.ycombinator.com/item?id=69097) landed me in the heart of the Middle Kingdom with almost no money, energy, or much of anything else (thank god I still had my laptop!).
After doing absolutely nothing for a good-enough while (and sleeping for curiously long hours) I found an apartment in northern Beijing to share with friendly Auzzi, American, and Icelander flat mates, and just chilled out.
Soon enough, I was able to read again (not being able to read anything productively was quite scary, let me tell you), be interested in things again (in the midst of my burnout, I remember muttering to friends that there was "not a single website on the entire internet capable of capturing my interest in any way" -- now, I have dozens of entire books waiting to be read, and hundreds of websites that I am voraciously drawn to), and generally found myself re-building my sense of self and confidence.
A couple of months ago I found a part-time job preparing rich Chinese students to write their SATs. Low costs and high relative wage made it easy to save up some $$$...
So, in a couple of weeks I'm headed to South East Asia to put my feet on the sands of a beach for the first time in 3 years, and then see what it's like to be poor in the tropics again. I've always loved traveling (especially the people one meets) and am quite interested in ideas relating to the "distribution of the future" to those who haven't got access to it yet. Though, I will more than likely be keen to make my next venture for-profit, even if it does have some empowerment of villages within its business model.
So, given the ready availability of well-paid teaching -- which can even be quite enjoyable if it's not just straight English teaching -- or online consulting/design, which can be done on any beach with a net connection, I think I will stay out in the land of cheap eating and warm sunshine until I've begun to implement my next idea, whatever that may be.
Then, depending on the nature of my idea, availability and necessity of a co-founder or initial employees, and cash-in-my-pocket, I'll either stay out here and attempt a life of work-whilst-continuing-to-enjoy-paradise, or head back to a more startup-friendly city in North America. Frankly, what I miss most of all while being out here is regular face-to-face contact with brilliant/interesting/kind people who speak my native tongue. Finding some sense of connectedness to like-minded people will be at or near the top of my list as I consider my next living base.
I'm Canadian, so my options may be limited to Montreal or Vancouver, which I consider the only livable destinations given who I am. I wouldn't mind visiting "the valley," but that would be contingent on making the right connections along the way.