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. Love Money

    Seed money or capital given by family or friends to an entrepreneur ...
  4. Angel Investor

    An investor who provides financial backing for small startups ...
  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 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. Entrepreneurship

    How Steve Jobs Changed The World

    As an innovator and visionary, Steve Jobs’s accomplishments can be held on a pedestal with the likes of Microsoft’s Bill Gates, Google’s Larry Page and Sergey Brin and Facebook’s Mark Zuckerberg.
  5. Investing

    A Look at the 5 Richest People in the World

    Who are the five richest people in the world and how did they manage that feat?
  6. Professionals

    Understanding Interpersonal Skills

    Interpersonal skills are the social skills people use to interact effectively with other people. A lack of good interpersonal skills may lead to unsuccessful personal relationships, as well as ...
  7. Investing News

    The 5 Wealthiest People in Mexico

    Most people in the know have heard of Carlos Slim and his massive fortune. But what about Mexico's other richest people?
  8. Entrepreneurship

    The Most Successful App Companies

    The rapidly expanding mobile-app industry is worth billions of dollars. Its growth has led to huge success for some firms and very little for many more.
  9. Investing Basics

    Undervalued Franchises: The Best Choice?

    Searching for an undervalued franchise? Here's a quick guide to what's hot and what's a good bet.
  10. Entrepreneurship

    How do people make money on the videos they upload to YouTube?

    Learn about the primary ways that people can generate income based on the videos they upload to YouTube, including advertising and product placement.

You May Also Like

Hot Definitions
  1. Treasury Bond - T-Bond

    A marketable, fixed-interest U.S. government debt security with a maturity of more than 10 years. Treasury bonds make interest ...
  2. Weight Of Ice, Snow Or Sleet Insurance

    Financial protection against damage caused to property by winter weather specifically, damage caused if a roof caves in because ...
  3. Weather Insurance

    A type of protection against a financial loss that may be incurred because of rain, snow, storms, wind, fog, undesirable ...
  4. Portfolio Turnover

    A measure of how frequently assets within a fund are bought and sold by the managers. Portfolio turnover is calculated by ...
  5. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
  6. Federal Funds Rate

    The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution ...
Trading Center