What is Bootstrapping in Business?

what is bootstrapping in businessIn business we hear this term tossed around but what is bootstrapping exactly?

Essentially bootstrapping is self-funding your own business, you are picking yourself up by the bootstraps to make your business happen. You aren’t looking for money from VCs or outside financing, you are funding your business on your own. While the idea that you need outside capital for success is prevalent, it’s simply not true.

Bootstrapping Defined

“Bootstrapping refers to the process of starting a company with only personal savings, including borrowed or invested funds from family or friends, as well as income from initial sales. Self-funded businesses do not rely on traditional financing methods, such as the support of investors, crowdfunding or bank loans.” (US Chamber)

Benefits of Bootstrapping Your Business

Full Ownership Control

When investors invest in your startup, they do so for a percentage of ownership. However, when you bootstrap your business, you retain all ownership and control. You get to make all the hiring, business model and development decisions for your startup. While this is a lot of responsibility, it also lets you build the exact business you envision.

Final Design Say

As the owner, you get to make the final design decisions on your product. From Day 1, you have had a product in your mind and that is the one that you get to bring to life. Designing a product with the input from outside investors can get tricky, so retaining this often leads to less stress and frustration.

Sense of Accomplishment

Building something from the ground up is extremely rewarding. You had a vision and turned it into a reality. Whether it’s a consumer product or a service, you made it happen.

Successful Businesses that Have Bootstrapped

GoPro. “Inspiration struck when he noticed that the cameras surfers were wrapping around their wrists to photograph their adventures kept breaking loose. Using his personal savings and a $35,000 loan from his mother, Woodman launched GoPro (originally known as Woodman Labs) in 2002. He bootstrapped the San Mateo, California-based business until 2012, when tech manufacturer Foxconn invested $200 million.” (CNBC)

SparkFun Electronics. The online retailer for hard-to-find circuit boards and gadgets has grown rapidly over the years, with annual revenue over $30 million. (US Chamber)

Mailchimp. “Now driving nearly $700 million in annual revenue, this email marketing platform started from a self-funded dream and is still 100% founder-owned.” (US Chamber)

Have questions about product development? Send us an email at info@3d-innovations.com


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April 2024

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