I started and bootstrapped my second tech startup 8 years ago. We saw constant growth and reached just under 2M in sales until 2012 when we were hit by some challenges out of our control, including a bogus patent troll suit (which was eventually dismissed). Being bootstrapped, we just didn't have too much of a safety net in place to deal with these issues. While I have been able to hold things together from then to now, it has been more 'survival mode' than anything else. I have tried a LOT of things, but it's all been on the cheap. Advisors have told me to cut back which I have. Since then it has been a constant struggle and sales have been heading downward. I am pretty much alone as I have no investors. While I still think our company has a lot of potential, I have not yet been able to make a rebound happen. Our direct competitors are funded companies, and it's tough to go up against them without any funding and in a defensive position. The investor types I talk to have always communicated that we make too much for an angel and not enough for a VC. I have cut back pretty much all I can (we have always been pretty lean anyway). I have what I think are some great and innovative ideas, but I don't feel I have the time and funding to make them happen. On my own, I am feeling less and less we will be able to bounce back. I have no idea what I will do if I have to shut things down. I have literally poured my life into my business to keep it going, so stakes are incredibly high for me and my family. I want to be pro-active and make sure I have things in order so that if it gets to the point where it needs to be shut down, I am not scrambling to find a plan B. Additionally, I am not even sure how to shut down a business of this magnitude with many nuts and bolts. Does it have to go bankrupt? Do you just shut down the website? Has anyone else gone through something similar?
Firstly, bravo for having the courage to post such an honest question. Only a true entrepreneur would be able to dig deep to find the courage to be so honest, particularly when the perception (and expectations) of entrepreneurs is to always "Put on a positive face and say everything is going great!"
1) You had $2M in annual revenue at some point, so you did *something* right and found a measure of p/m fit. This means there is a great chance you can recover this. But it might mean ripping your product and whole business functions apart and rebuilding just the best bits and the parts most relevant for today. Prepare for potential layoffs and new hires, as the business may look very different.
2) While the patent-troll issue sucks, I'm assuming there have been no permanent damages to the product or market-shifts that have affected you. So it could even just be a cashflow-gap that needs to be plugged with a bit of debt-financing
3) I've yet to discover a company making sales that isn't attractive to at least 1 investor. Every investor has different portfolio goals, personal goals and personal interests, flaws, strengths and traits. While the terms may not be super favourable because of your exposed position, there will be investment options if you can repackage and re-position the company correctly
4) Emotionally, I strongly recommend you find a few really close entrepreneur connections you can rely on for emotional support. Founders have *very* few people we can be emotionally open with, and it's important you find some people now so that they can be a part of creating the solid, rock hard foundation that you will need for the journey in front of you.
5) Winding down companies is easy (technically). The emotional problems are the hardest. Be sure to have a personal plan B in place (house payments, family maintenance). To start you off, know that entrepreneurs who have taken a journey such as yourself will *always* be in high demand for bigger startups willing to pay fat salaries. Just be sure you have the personal cash to survive for a few months while you find that job (and get your personal expenses in order NOW in case that happens.)
6) I'd love to do a call with you to see if I can offer any perspective about the current business. Message me and I'd be happy to help out ("on the cheap")