I bootstrapped our mobile software company simply because I knew we would turn a profit within the first month of sales (which we did, 3-5x ramen profitability :)).
The problem, however, was that most people just aren't built for startups. So while I kept things extremely fair — everyone was on a 50/50 profit share, myself included, after operational expenses were paid (less than 4%) — that just wasn't enough to keep people motivated to reach the 2-3 year end goal.
To be fair, I think it was less about motivation and more about income and lifestyle. But again, most people just aren't prepared/designed for startup life which in this case would have required they code in the evening hours after their full time job was over. Ha!
Startups are difficult, getting traction is difficult (the juice), and I would say that assembling a skilled team is equally challenging and will significantly impact chances of success/survival — never settle with your team. The challenge with building a team is that startups will change people, especially virgin startup-ers who've never experienced the workload. Burnout/frustration in combination with low pay and kool-aid stock options will destroy a team in a year or two if they're not prepared.
All that being said, this month I've decided to take a drastic turn and attempt to raise a small amount of money to make a few full-time hires. The good news is, I proved myself as a young entrepreneur and we may secure a really awesome lead investor that could do a lot more for us than just give us money.
I definitely recommend bootstrapping, it helps you set realistic priorities based on severely limited resources (prepares you for when times are rough), and helps you find the holes where investors can provide value besides just $$.