- Financial Advisory
- Financial Dictionary
In venture capital terminology, the term Bootstrapping refers to an entrepreneurial technique whereby the entrepreneur starts the company with a small amount of capital. This capital can come either from the revenues of the start-up company or by the founder using their own money.
For example, many small technology firms have used Bootstrapping in order to produce an innovative product. This includes Microsoft and Apple Computer who were involved in the initial development of the personal computer. The Bootstrapping technique involves a certain amount of risk, although it does give the entrepreneur complete control over all company decisions. In addition, the entrepreneur does not have to pay out a large amount of the start-up costs, which would be the case if they were to use venture capital. Bootstrapping therefore makes a reasonable business start-up funding technique for anyone trying to start a business with a high likelihood of future success.