bootstrapping

  

Definitions (3)

1.Building a business out of very little or virtually nothing. Boot strappers rely usually on personal income and savings, sweat equity, lowest possible operating costs, fast inventory turnaround, and a cash-only approach to selling. Many of today's largest corporations (such as Apple computer, Clorox Co., Coca Cola, Dell Computer, Hewlett-Packard, Microsoft) began as boot-strapped ventures. Most of world's startups still follow this road; either because there is no alternative, or because of the unmatched control and independence it offers.
2.Forecasting beyond one period by relying on the forecasted data for that period itself.
3.A type of business funding that seeks to avoid relying on outside investors. By not relying on outside sources of funding, the business will not have to dilute ownership through issuing equity, and will not rely on outside banks for debt. This type of funding increases the level of risk for the business owner, since the money for the business is coming more or less out of pocket. For example, a movie director might finance a project through credit cards or a second mortgage rather than by obtaining funds from a movie studio. The term derives its meaning from the expression "lifting oneself up by one's own bootstraps", referring to raising oneself up by one's own means. Also called bootstrap funding. See also self-financing.

Use bootstrapping in a sentence

  • The bootstrapping of the young start-up was impressive as they grew substantially but struggled in the beginning which makes for a nice hero's story.

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  • It will feel great to know that all of your bootstrapping paid off when your business finally hits it really big.

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  • Arthur didn't believe in asking for loans and instead endorsed the value of bootstrapping, believing anyone could build a business from the ground up.

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