Bootstrapping means building a business without external financing. See how this differs from businesses funded by investors.
- Bootstrapping, in its simplest form, is building a business without any external financing. So you are essentially offering some value to a customer or a group of customers, and they are paying you for providing that value, and what that translates into is revenue basically. Customers paying you is revenue, and that is the money that is funding the organic growth of the business.
This is bootstrapping. Now, if you hold that against what bootstrapping is not, it is not using a lot of investor capital. Investor capital is not revenue. Investor capital is either debt or equity. And investors could be all kinds of things. It could be VCs. It could be angels. It could be friends and family. It could be banks. It could be other kinds of financial institutions. All of those, however, when they participate in a company, in your company, they're gonna be participating as equity or debt investors, and when you involve investors, you are no longer bootstrapping necessarily.
You are basically using investor capital to build your company.