Bootstrap

AAA

DEFINITION of 'Bootstrap'

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.

INVESTOPEDIA EXPLAINS 'Bootstrap'

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.

RELATED TERMS
  1. Business Bondage

    A state of feeling inexorably intertwined or even imprisoned ...
  2. Spot Rate Treasury Curve

    A yield curve constructed using Treasury spot rates rather than ...
  3. Angel Investor

    An investor who provides financial backing for small startups ...
  4. Love Money

    Seed money or capital given by family or friends to an entrepreneur ...
  5. Seed Capital

    The initial capital used to start a business. Seed capital often ...
  6. Bootstrapping

    1. A procedure used to calculate the zero-coupon yield curve ...
RELATED FAQS
  1. If I retire in the Philippines, will I be able to work or start a small business?

    Foreign retirees entering the Philippines with plans to become permanent residents may start a business or work once they ... Read Full Answer >>
  2. What are some good resources to help entrepreneurs develop a business model?

    There are a number of resources available for entrepreneurs developing business models. Online resources provided by bloggers, ... Read Full Answer >>
  3. What's the difference between a financial plan and a financial forecast?

    Selecting the appropriate business structure for a new company can present challenges to an entrepreneur. Considerations ... Read Full Answer >>
  4. For what sorts of purposes can the funds in a share premium account be disbursed?

    Deadweight loss is the cost of market inefficiencies due to government regulations that prohibit natural market equilibrium. ... Read Full Answer >>
  5. What are some examples of how corporations manage short-term investments?

    One of the easiest ways for a business owner to reduce liability is to incorporate as a legal entity to enjoy the protection ... Read Full Answer >>
  6. How can I merge technical analysis and fundamental analysis with quantitative analysis ...

    It is important for a sole proprietor with no employees to register as a limited liability company because an LLC provides ... Read Full Answer >>
Related Articles
  1. Entrepreneurship

    Are You An Entrepreneur?

    Many people want to start a business, but not everyone has what it takes to succeed.
  2. Entrepreneurship

    5 Alternatives To Starting Your Own Business

    Want to start your own business but don't want the hassle of doing it by yourself? Find out how.
  3. Entrepreneurship

    The 10 Greatest Entrepreneurs

    These 10 entrepreneurs' names will live on long into the future - perhaps even after their enterprises are gone.
  4. Economics

    Explaining the Cash Budget

    A cash budget is a plan for the inflows and outflows of cash for a business or an individual.
  5. Entrepreneurship

    Can I Become An Angel Investor?

    Because of SEC rules, you already need significant assets to become an angel investor.
  6. Economics

    Tech Startup Momentum Being Generated In Detroit

    Rising from the ashes in the once proud auto-manufacturing City of Detroit is a rapidly emerging tech startup scene that could prove to be its salvation.
  7. Entrepreneurship

    The 10 Richest Women In Fashion

    The top 10 richest women in fashion have many similarities as well as differences. From nationality to career trajectory, these women have established themselves in their own unique ways.
  8. Entrepreneurship

    Should I Have An IPO on My Business

    The ultimate outside investment opportunity is going public through an initial public offering. However, IPOs come with costs that you may want to avoid.
  9. Entrepreneurship

    8 Fascinating Traits Billionaires Have In Common

    A top-notch education isn't enough to strike it rich. Nothing compares to learning the habits of the world's famous entrepreneurs and industry leaders.
  10. Entrepreneurship

    Why Small Business Owners Need Financial Advisors

    Small business owners are too busy to effectively manage their own money. That's why a financial advisor can be a big help.

You May Also Like

Hot Definitions
  1. Butterfly Spread

    A neutral option strategy combining bull and bear spreads. Butterfly spreads use four option contracts with the same expiration ...
  2. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
  3. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random ...
  4. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  5. Productivity

    An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in ...
  6. Variance

    The spread between numbers in a data set, measuring Variance is calculated by taking the differences between each number ...
Trading Center