Lightenco: Reaching the Limits of Bootstrapping?
In January 2018, the three founders of Lighting Enhancement Corporation (Lightenco), a Canadian turnkey lighting solutions enterprise, were at a crossroads. After building a successful business enterprise over seven years by relying entirely on internal financial sources, the founders of Lightenco now faced a difficult decision. Energy subsidies from the provincial governments of Quebec and Ontario had underpinned part of Lightenco's value proposition to customers, but these subsidy schemes were facing imminent termination in both provinces. Moreover, the financing option that Lightenco's three founders had deployed-relying on internally generated funds and not taking external capital-no longer seemed tenable, and moving to the next level of growth seemed to necessitate new and innovative financing options. Should the founders persist with the bootstrapping that had now become part of their entrepreneurial mindset? Or should they scale the business by either giving up equity or subsuming their operations in a merger with a larger firm? The founders were at a tipping point and had to decide which option to take.