A situation in which an entrepreneur starts a company with little capital. An individual is said to be boot strapping when he or she attempts to found and build a company from personal finances or from the operating revenues of the new company. (Source: Investopedia)
Starting a company is not easy. It takes a lot of patience. Imagine pushing yourself to wake up in the morning and accomplishing stuff that you’re not even sure will fly or not. Some say the journey is the reward. Yes, I agree. But fighting the emotions of giving up and just pushing on, is just draining sometimes.
Every entrepreneur will tell you to plan for the worst. You also need a lot of support — emotionally, mentally, and spiritually. You will judge yourself everyday. You will tell yourself if you’re doing a good job or not. These are stuff that are expected. No one said it would be easy.
I learned about the word boot strapping after reading books on entrepreneurship. As defined, it is using your own resources to fund your own company–no venture capital, no angel investment. How far can you go boot strapping? Not too long. Which is why many startups will soon require additional funding.
Investopedia explains further:
Compared to using venture capital, boot strapping can be beneficial as the entrepreneur is able to maintain control over all decisions. On the downside, however, this form of financing may place unnecessary financial risk on the entrepreneur. Furthermore, boot strapping may not provide enough investment for the company to become successful at a reasonable rate.
As you can tell, boot strapping may work a while until it puts a toll on your own financials. It’s a big risk to go boot strapping early on. But this move will also show your potential partners that your putting more “skin in the game.”
What about you? What are your thoughts about boot strapping for a company your building? Is it a good idea? Is it a crazy idea?