US affiliate startups: Funding versus bootstrapping
Industry executives from US affiliate startups discussed the issue at iGB Affiliate London 2023
The iGB Affiliate London 2023 day two conferences continued with ‘Startup stories: breaking the US as an independent affiliate,’ where MediaTroopers Co-Founder and COO Benjamin Truman, BritishGambler.co.uk and Gambler Labs Founder Alexander Kostin and The Game Day Director of Affiliate Partnerships Rachel Fitter sat down with RB Capital Co-Founder Ben Robinson to discuss the issue.
The discussion comprised several topics, including barriers and challenges for such affiliates, along with regulatory fines and even the UK White Paper on gambling.
One other important area of discussion was a debate involving funding versus bootstrapping, with both Truman and Kostin explaining their preference for the former, as Fitter discussed The Game Day’s preference for the latter.
For Truman, bootstrapping is very much a European idea, but not so much for Americans, who often say ‘let’s go get money.’
“But sometimes you don’t want to deal with investors, especially if you need to make a decision on the fly, if you need to change something,” he noted.
“If you can start yourself and see how things go, you should. But you can always go and get money. If your product is good and your idea is good, there is money out there. When you’re bootstrapped, yes, you can’t expand as fast, there is a lot more risk.
“But at the end of the day it’s risk/reward. If you bootstrap – like we have at MediaTroopers – and grow into the market share we have today, it’s amazing. When you have investors you have somebody to answer to.”
Kostin, who is behind the likes of NJ.bet and NY.bet, echoed such sentiment, noting that you need money to go big and bold in US.
“But in the early stages you don’t have a choice, you have to use your own pocket money to start the site,” he said. “You need to have a proof of concept, you can’t just say ‘I am an affiliate website give me money.’
“You show something, you start growing, and then investors come to you. Then you can decide if you want to share with them or not.”
BritishGambler.co.uk and Gambler Labs Founder added that before accepting any offer to sell, affiliates must be on the same page with the interested investor, with issues arising if the two parties simply don’t have the same chemistry.”
On the other side of the coin is The Game Day, with its Director of Affiliate Partnerships Fitter explaining the group’s reasoning for going down the investor route when growing the affiliate.
“We’re building a media company and building a brand, so the idea behind taking investor money was because it was very expensive,” she said. “We have a lot of personnel, we have a New York City office which is not cheap, we have all the tech equipment for the site, so we really wanted to make sure we had those up-front site costs, so that as the markets legalised and states came online, we were in a good position to send those customers to sportsbooks and casinos.”
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