Know what is Bootstrapped Startup

Know what is Bootstrapped Startup

These days, the third season of Shark Tank India is going on and if you have watched any episode, you must have heard many times that some startup founders used to call themselves bootstrapped. Now the question arises that what does bootstrapped mean and from where do such startups get money (How Bootstrapped Startups Arrange Fund)

In today's time, startup culture is growing rapidly. In such a situation, people get to hear new startup terms. One such startup term is Bootstrapped Startups. These days, the third season of Shark Tank India is going on and if you have watched any episode, you must have heard many times that some startup founders used to call themselves bootstrapped. Now the question arises that what does bootstrapped mean and from where do such startups get money (How Bootstrapped Startups Arrange Fund).

First know what is bootstrapped startup ?

If we understand in simple language, that startup is called bootstrapped startup, which has not taken money from any investor for the business. That means all the money is invested by the founder in that business. This money could be his own savings or borrowed from a friend or relative or a loan from a bank. In this type of business, all the equity is with the founders.

What is the advantage of bootstrapped startup?

There are many benefits of a startup being bootstrapped. The biggest advantage is that the entire equity of the business is with the founders, so there is no need to share the profits with anyone else.

Since there is no outside investor, the entire control of the business is in the hands of the founder.

After the arrival of investors, many times the vision of the business changes in order to earn profits, but bootstrapped has this advantage and the founders can do business keeping their vision in mind.

How do bootstrapped startups arrange money?

Whatever startups are bootstrapped, they use many types of sources for money. Let us know about each one one by one.

1- Own savings money

Most startups start their startup using their savings. Some founders are from rich families so they have some money to start the business or rather they get that money from someone at home. There are many founders who work for the first few years and raise money, after which they start their startup.

2- Borrow from friend-relative

Most of the founders start the business with their own money, but later when they need money, they ask for loan from friends and relatives. Some founders start the business by taking loan, but in such situations they get very little money because the risk is very high.

3- Loan from bank

Most of the bootstrapped startups start the business by investing their own money and then when they need money, they take a loan from the bank. However, for this you have to convince the bank that your business is doing well or has the potential to improve a lot.

4- Earning from side project

There are many startups that run a side project to achieve their main vision, so that they continue earning and the startup does not have to face financial problems. For many people, this side project is their job, for many people it is a side business, while many people earn money for their startup by doing consulting services or part-time jobs.

5- Crowdfunding and community support

You can also raise money from crowdfunding platforms by showcasing your innovative idea. This is a very popular method for bootstrapped startups. Through this he raises a lot of money and takes his business forward. If your startup idea is such that it is benefiting many people, then you can easily get a lot of money from crowdfunding.