Bootstrapping

Indian Economy glossary

Topic: Industrial Policy, Public Sector, MSMEs and Disinvestment · NCERT: Beyond NCERT

Meaning

Bootstrapping means building and growing a startup without outside investors. The money comes from the founders' own savings and from the revenue the firm earns. Because no shares go to investors, the founders keep full ownership and control. The downside is slower growth, because the firm can spend only what it earns.

Example

Zoho and Zerodha are well-known Indian firms that grew mainly on their own revenue. They became large without depending on venture capital.

Don't confuse with

  • Seed funding: seed funding is the first money that comes from outside the firm. Bootstrapping uses no outside money at all.

Related concepts

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