Dec 04

Get to know Bootstrapping in Entrepreneurship

bootBootstrapping is a term used to describe a variety of different methods to avoid the use of the financial resources of external investors. Bootstrapping can be defined as “a set of methods used to minimize the number of external debt and equity funding is needed from banks and investors.”

The use of private credit card debt is a bootstrapping method is the most widely known but a number of variations of this method available to the entrepreneur. Although the risk does not include bootstrapping a bit for the entrepreneur who founded a startup, the absence of other shareholders give founders more freedom to develop companies according to its own vision and mission. Many successful companies including Dell Computers and Facebook was founded by way of bootstrapping.

The following are a number of methods of bootstrapping:
1. owner Financing
2. Equity sweat (sweat equity)
3. restrictions on debt
4. the combined use of
5. payment delayed
6. restriction of inventory
7. Funding the subsidies
8. personal debt