One of the things we discuss a lot at my firm is how much capital is needed to build a pan-European or global technology business. Plenty has been written in the VC and tech blogs recently about how little capital so-called Web 2.0 companies need to get going. I won't rehash those pieces here but you can follow some of the debate on Peter Rip's weblog.
But I would add that even before it became so cheap to start a web-based business, entrepreneurs were redefining how efficiently they can use capital to get off the ground and become self-sufficient. During the funding "nuclear winter" of 2001-2003 thousands of startups went out of business, but several hundred also survived. And I argue that those that survived on their own wits alone (that is, without a bank full of 2000-era VC cash) are some of the strongest, most viable businesses today.
Capital efficiency is not just about only raising the capital you really really need. It is also part of corporate culture. My investment firm, Kennet Capital, doesn't really like looking at Series C, D or E venture rounds, not only because the cap table is going to be ugly, but also because after years on the venture drip feed the company is likely to have a wasteful spend culture. There are of course exceptions, but on the whole we have found bootstrapped businesses --or those that have raised only a little capital -- leaner, more efficient and in the long-run more likely to succeed.
A good spin on this topic is provided by Jim Quist, CEO of Medefinance, in this article on Sandhill.com, where he lays out a few guidelines about how and when to raise capital into a bootstrapped business.