A bootstrapped startup is a company that is started and operated without the need for significant outside funding. Instead, the founders of a bootstrapped startup use their own personal resources, such as savings or credit, to finance the initial stages of the business. They may also generate revenue through early customers or pre-orders to fund their growth.
Bootstrapping a startup has several advantages, such as:
The founders have complete control over their business and don't have to answer to outside investors.
They don't have to give up equity or control of the company in exchange for funding.
They can focus on building a sustainable business model that generates revenue instead of chasing funding.
They may be able to build a profitable and cash-flow positive business.
However, bootstrapping also has some limitations, such as:
The founders may have limited resources and may not be able to pursue all opportunities.
They may not have access to the same level of expertise, networks, and resources as a venture-backed startup.
They may have to forgo growth opportunities that require significant capital.
Bootstrapped startups can also be known as self-funded, self-sustaining, or "bootstrapped" companies.