What is Bootstrapping?

Bootstrapping is the process of building a business from scratch without attracting investment or with minimal external capital. It is a way to finance small businesses by purchasing and using resources at the owner’s expense, without sharing equity or borrowing huge sums of money from banks.

For many entrepreneurs, it’s not always clear which funding model best suits your business goals. Should you go with a VC, an angel, an accelerator, crowdfunding, or all of the above? Should you simply fund your company on your own? Each route, whether bootstrapping or tapping into outside investors, has its pros and cons.

You’re on your own

What bootstrapping really means is pulling your own weight, with maybe the support of another buddy who’s also crazy enough to believe that you can turn an idea into billions of dollars.

When you bootstrap, you need to solve more problems with fewer resources. However, that necessity allows you to become resourceful and learn new skills you never even thought are capable in a short span of time.


Without a large amount of cash on hand, the company might not be able to develop key components as quickly as desired.

A certain amount of revenue will be required for expanded R&D, hiring and marketing, and more time and planning will be needed to achieve those goals. Some growth milestones may take longer to reach, and targets might have to be pushed further down the line.

Limited resources also mean little money for attracting top talent

Although this becomes an upside when you find first-rate employees who are as passionate as you are in your vision. More often than not, these are buddies and former colleagues who are willing to leave high-paying jobs to join you in building what they believe would be a life-changing cause.

Founders Wear Multiple Hats

If you’re bootstrapping, you’ll need to keep costs down as much as possible. You can’t afford to pay a full staff or outsource work, so your job title won’t just be owner – it’ll be owner, marketer, accountant, manager, and so on. To successfully handle all of these responsibilities, you’ll need to dedicate extensive time and mental energy, which could lead to burnout. Your family and social life will take a firm backseat to your company, so you’ll need to ask yourself if this is a sacrifice you’re willing to make.

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