2014 Bootstrapped Sentiment Survey Report

2014 Bootstrapped Sentiment Survey Report
February 1, 2015 Mainsail Partners

In Mainsail’s fourth annual survey of bootstrapped entrepreneurs, 460 respondents shared their outlook on the U.S. economy, highlighted upcoming challenges and opportunities for their businesses and shared insights on the number one issue facing management teams in the coming year – finding and retaining good people.

This particular segment of entrepreneurs is uniquely focused on growth and profitability. As a result, they’re often more in-tune with economic headwinds and changes in the business environment, and can serve as an early indicator of trends in the broader market.

The survey results indicate that overall entrepreneurs are significantly more bullish about the general economy than they were two years ago. For the third year in row, survey respondents said they believe the economy will do better next year. In fact, 60% of entrepreneurs agreed with that statement in 2014, compared to 54% in 2013 and 42% in 2012.

This trend of increasingly positive sentiment is not surprising  coming out of a recession, and is consistent with  respondents’ views of their own businesses. Eighty-one percent anticipate their business will grow faster in the coming year, versus 75% in 2013 and 65% in 2012. As another signal of optimism,  67% say they will hire more people in 2015 than they did in 2014.





Product development led the way as the most important area of investment for the third year in a row. Fifty-seven percent of survey takers cited “Product development” as one of their top areas of investment for 2015.  Increased focus on delivering great products and customer experiences will only continue as word of mouth and social media play a bigger role in the decision and buying process.

“Hiring people” and “Marketing/PR” also saw significant jumps in the number of respondents highlighting these areas as investment priorities. This is yet another signal that companies are seeing an opportunity to grow more aggressively and take market share. Many of the open ended responses referenced acquisitions and strategic partnerships as investment opportunities for 2015.


Finding talent continues to be  top issue.  As companies focus on investing for growth, finding and hiring good people remains the biggest challenge for management teams. In fact, this is the third consecutive year “Finding good people to hire” has been cited as the biggest challenge for companies in the survey. And the issue is gaining steam: 57% of entrepreneurs and management teams cited this as a challenge in 2014, compared to 48% and 45% in 2013 and 2012, respectively. The second half of this report will take a closer look at the specific issues companies are facing related to recruiting and retaining top talent.

Increased concerns about lack of capital. One of the most significant changes from the previous year’s survey was the percentage of respondents (42%) citing “Lack of capital” as their biggest challenge in the coming year. This is a jump from 35% of respondents the prior year.  There are a number of factors likely contributing to this issue.  As the economy continues to improve, many bootstrapped entrepreneurs are identifying growth opportunities that can’t be funded through their own capital reserves.  Additionally, many of these companies don’t have access to the relatively cheap credit markets available to larger, more established companies.  This dynamic is adding up to missed opportunities for growth.

Regulations and expenses less of an issue. For three years, the number of entrepreneurs citing “Increased regulations” and “Increased business expenses” as their biggest challenge has declined. Greater visibility into the impact of the Affordable Care Act, as well as a better understanding of the scope and impact of financial regulations coming out of the recent recession may be contributing to this diminishing concern.


Hiring good people has been identified as the biggest challenge managers are facing in the new year for three straight years. With 98% of entrepreneurs and management teams saying they plan to hire this year and 67% planning to hire more people than last year, it’s understandable that the issue is top of mind. Mainsail decided to take a closer look at the hurdles of hiring in this year’s survey.

Finding top talent. First, we wanted to better understand where companies were having the most success sourcing their talent. We asked entrepreneurs and managers to name their top three sources for finding senior level talent, which was defined as VP title and higher. The number one response by a significant margin was “Word of mouth” with 72% of respondents saying it was one of their top sources. This is not surprising given how much time we spend mining Mainsail’s network to identify senior management hires for our portfolio companies. The second most selected option was LinkedIn which had more responses (38%) than every other job board or online resource combined.

A bit more surprising was the order in which respondents ranked their most difficult hires by function. Given the attention the market for technical talent receives, it was interesting to note that more managers (54%) indicated that “Sales” was one of their top three most difficult functional hires. “Engineering” and “Product” were a distant second and third with 41% and 20% respectively.  More managers (35%) also identified their “Head of Sales” as the most impactful senior hire in the organization, with only 10% selecting “Head of Engineering”.



Culture matters most. There is a widely shared saying, Culture eats strategy for breakfast. Apparently many of our respondents agree with that statement – at least as it relates to recruiting and employee success. When we asked what managers believed were their top three most important tools for recruiting and retaining top talent, “Great culture” was selected by more than 73% of respondents. Even “Competitive compensation” was a distant second at 53%.

We followed up the question by asking what factors contributed the most to making a new employee successful. Eighty-one percent of respondents selected “Culture fit” and no other answer broke the 50% barrier. “Setting clear goals for new hires” was the next most selected response with 44%. While the numbers are somewhat shocking, we have seen time and again the influence a strong or weak culture can have on a company and understand this perspective from entrepreneurs.


Mainsail is a leading growth equity firm focused on investing in growing, bootstrapped businesses. Our firm maintains relationships with thousands of entrepreneurs and executives at these companies. The Mainsail Bootstrapped Sentiment Survey was conducted via an online survey sent to entrepreneurs and senior executives at U.S. based companies.

The survey was conducted between November and December of 2014 and resulted in 460 completed and qualified responses. This is the fourth annual Mainsail survey and is intended to help us continue to understand the needs and perspectives of companies that Mainsail invests in and helps to grow.

For the purposes of this survey, “bootstrapped companies” are defined as businesses which have taken no previous capital from venture capital firms, private equity firms, or other institutional investors. Qualification as a bootstrapped company was verified through prior conversations or in some cases via a qualifying question.