What is a bootstrapped startup?
One common question among the new starters. Seems an intresting word when you hear BOOTSTRAPPED or Bootstrapping for the first time.
This word dates back to early 18th century, when people used to wear large boots with a handle/strap at the end, to make it easier to wear.
A simple straightforward meaning is " BY OWN SELF"
Bootstrapped startup 🌟 - a bootstrapped startup is one that has been started and operational without any external funds. Bootstrapped startups use their own money to start and reinvest in its growth.
The founders invest their savings and earnings from previous job/business into the startup.
Most common practice such startups follow is a very famous term JUGAAD. It means using the existing resources intelligently to get things running. While bootstrapped startup has its own advantages, it also has disadvantages.
Advantages - no pressure from external investors for growth/results or payback, no intrests to pay, no equity to share with anyone, you are the whole owner of profits (after tax ofcourse) Disadvantages - slow growth, without financial backing the startup may suffer or even die in bad business periods, no pressure = no motivation to grow, so most people get comfortable with small profits.. etc
Depending upon the Founder and the business, one may decide whether it is good idea to go for Bootstrapping or Fundraising. Some of the most successful notable Bootstrapped Startups are ZOHO Corporation, Freshworks, Fusioncharts and Zerodha
If you need any help, feel free to connect
If you like to read a detailed story of a very successful fully bootstrapped Indian Startup read this book. Highly recommended.