You’ve heard of serial entrepreneurship—when an individual builds a slew of businesses throughout their lifetime, or heads multiple businesses at the same time. You’ve also heard of solo entrepreneurship—when an individual starts a business without the objective of adding additional staff. The lesser-known face of entrepreneurship, however, is the bootstrapped entrepreneur.
The familiar expression “pulling oneself up by one’s bootstraps” was originally intended to inspire someone to proactively better their situation independently of another person or outside help. This concept eventually bled into the business world and influenced a new subsection of entrepreneur—the bootstrapper.
A bootstrapped entrepreneur builds a company with limited resources, relying on their personal savings instead of being supported by an onslaught of financial support from one or multiple investors. Some entrepreneurs believe they only stand a fighting chance at success if they have an ample financial safety net underneath them before starting a business. For these entrepreneurs, peace of mind is tied to monetary support. They will dedicate months pitching their business idea to investors with the goal of securing millions of dollars.
Bootstrapped entrepreneurs, however, believe that more startup money does not equate to a higher success rate. There are advantages to this approach to business. Starting with less funding not only decreases overall risk, but you won’t have an investor watching your every move. What many entrepreneurs don’t realize is that over 80 percent of successful businesses are actually self-funded, with some only starting out with $10,000.
While more challenging, bootstrapped entrepreneurs are thankful for the lessons and insight they glean from running a business with more limited resources. It forces them to be more creative and rely on their intuition, rather than on money. Nathan Chan, CEO of Foundr Magazine, has this to say about bootstrapped entrepreneurship: “By self-funding, you have the ability to control your own destiny.”
In today’s economy, raising capital for a business is easier than ever before. The most challenging facet of business is building the foundation for a sustainable, profitable startup. Bootstrapped entrepreneurs are faced with the task of getting good fast, rather than keeping their startup afloat on their investor’s dime, which begs the question: what happens when that capital eventually dries up?
Bootstrapping allows entrepreneurs to recognize their talents early on so they can build on those skills over time. There may be more hardships at the onset, but the lessons learned from these ventures will not only make your current startup more successful, but it gives entrepreneurs the know-how to turn all of their business ideas into scalable, prosperous companies.