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What Does Bootstrapping a Startup Mean?
Bootstrapping is a very common term you see thrown around in the startup world. Those new to the startup world have probably asked themselves, what does bootstrapping a startup mean?
kyleplatt.com
We freelanced on the side for a year to use the revenue to build the SaaS product. Called it Bootstrapping. Essentially to me it means taking no outside money for equity.
This is exactly how we approached one of our first startups as well. Lived in a saturated market that had uneducated customers. Led directly to software users looking for that extra tier of freelance/services on top of the automation.
Had some advisors tell us we were crazy but it provided revenue to scale the engineering team and a direct line to customer feedback. Not too mention a figurative 'tap' that we could turn on and off based on capacity.
Are we startup twins? Exact same feedback from advisors, but here we are...making revenue and still hold all equity.
Haha, I love it. We really let some of the advisors sway us on our perceived success because of that advice. Some 6 months later we took a fresh look at our competitors in the space and noticed that over 80% of them either 'did' or are 'doing' the same thing. Really changed how we created our inbound funnels too. Glad to see others in the same boat here
This article is pretty fluff. I'm sure IHers already knew what was in there
I think the article is actually pretty poor. Written as part of his 'Grow Blog Traffic from 0 to 1000 As Fast As Possible - Challenge'. It's seems thrown together as quickly as this forum comment.
Bootstrapping a company is more about starting small with the intent to grow only through re-investing profit. This is meant more or less directly in contrast to the recent Silicon Valley VC model of growing quickly through investing lots of cash from somewhere else.
The platonic ideal of a bootstrapped company would start from $0 using free hosting and never use any outside money. The more money is injected the less bootstrapped a company is. If a billionaire uses millions of their own money to bankroll a company then it wouldn't be considered bootstrapped.
'friends and family' investment is where the real grey area is found. How much of your own and family money is acceptable is where people often differ. For me you start to lose your 'bootstrapped' label when investing more than about $1k per month of outside cash money.
I am surprised someone posted my article here. You are absolutely correct it is pretty fluffy and for the reason you mentioned. Was a pure SEO play, did not even share this out to my own networks much. Majority of what I write is not SEO focused at all, so I did a couple to help with search engine ranking.
I don't disagree with most of what you said!
Interesting article. I always wondered whether a bootstrapped business - if they then went on to be funded later down the line - would they still be classed as bootstrapped or formerly bootstrapped or would they be called a funded startup?
Bootstrapping generally means starting and growing a business without outside help or financial support, typically by reinvesting the money earned from the business back into the business to fund further growth. This is in contrast to raising funds from external sources such as investors or banks. In this sense, "bootstrapping" means relying on the business's own resources to get started and grow, rather than seeking outside help.
From my perspective, bootstrapping generally means starting a startup with your own fund and scaling with the funds you get from the profit. But I heard there's a bootstrap company accelerator called TinySeed.com, looks pretty legit!
I would say self funded, small team no big spending but this is great thank you! I recently launched www.getmangoo.com a simple google analytics alternative that is privacy first We are GDPR compliant and no need for cookie banners! Will leverage you advice as I grow Mangoo Analytics. Thanks
For me it’s using your own savings and doing things without excessive spending. When you take investor money it’s no longer bootstrapped.
Choosing whether to bootstrap vs. get funding isn't always a choice. Some products won't get funded regardless so bootstrapping is the only option. So many articles on this topic seem to miss this salient point.