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Funding & Investment

Bootstrapping

Also Known As

Self-FundedBootstrap

Bootstrapping is the practice of building and growing a startup without external investment, relying instead on personal savings, revenue from customers, or minimal outside capital.

What is Bootstrapping?

Bootstrapping means building a business without venture capital or significant external funding. Bootstrapped companies grow through revenue and careful resource management.

Why Bootstrap?

Advantages:

  • Full ownership retained
  • No investor pressure
  • Forced profitability focus
  • Freedom to make decisions

Disadvantages:

  • Slower growth
  • Limited resources
  • Personal financial risk
  • May miss market windows

Bootstrapping Strategies

  1. Revenue First: Get paying customers immediately
  2. Consulting: Fund product with services
  3. Side Project: Build while employed
  4. Pre-sales: Validate with customer commitments
  5. Minimal Burn: Keep costs extremely low

Famous Bootstrapped Companies

  • Mailchimp (sold for $12B)
  • Basecamp
  • Calendly
  • GitHub (initially)

Bootstrapping vs Studios

Bootstrapping and venture studios are opposite approaches:

AspectBootstrapStudio
FundingSelf/revenueStudio capital
GrowthOrganicAccelerated
Ownership100%50-70%
SupportNoneFull

Example Usage

“She bootstrapped the company to $2M ARR before considering outside investment.”

Real World Examples

MailchimpBasecampCalendly

More Funding & Investment Terms

Pre-Seed Funding

Pre-seed funding is the earliest stage of external startup financing, typically used to validate an idea, build an initial prototype, or support founders before product-market fit.

Seed Funding

Seed funding is the first significant round of venture capital financing, typically raised after initial product validation to hire a team, develop the product, and achieve early growth milestones.

Series A

Series A funding is typically the first major venture capital round after seed, raised when a startup has proven its business model and is ready to scale operations, team, and customer acquisition.

Limited Partner

A Limited Partner (LP) is an investor who commits capital to a venture fund (including venture studio funds) but has limited liability and no involvement in day-to-day investment or operational decisions.

General Partner

A General Partner (GP) is the managing partner of a venture fund who makes investment decisions, manages portfolio companies, and has unlimited liability for the fund's obligations.

View All Glossary Terms