Which term describes starting a company with limited or no external funding, relying on personal resources?

Which term describes starting a company with limited or no external funding, relying on personal resources?

• A. Venture Capital
• B. Crowdfunding
• C. Bootstrapping
• D. Angel Investing

Answer: (C)

Bootstrapping describes starting a company with limited or no external funding and relying on personal resources to get going. It means using your own savings, reinvesting early profits, and keeping costs tightly controlled so the business grows from the revenue it generates rather than from outside investors. This approach helps you maintain full ownership and make decisions quickly, but it also requires discipline to manage cash flow and a willingness to grow more slowly because you’re not tapping large external capital. In contrast, venture capital and angel investing involve outside funds in exchange for equity or a share of future returns, which can accelerate growth but reduces ownership and brings investor expectations. crowdfunding pools small contributions from many people, which is also external money but usually tied to a campaign and public interest rather than a single source of capital.

Bootstrapping describes starting a company with limited or no external funding and relying on personal resources to get going. It means using your own savings, reinvesting early profits, and keeping costs tightly controlled so the business grows from the revenue it generates rather than from outside investors. This approach helps you maintain full ownership and make decisions quickly, but it also requires discipline to manage cash flow and a willingness to grow more slowly because you’re not tapping large external capital.

In contrast, venture capital and angel investing involve outside funds in exchange for equity or a share of future returns, which can accelerate growth but reduces ownership and brings investor expectations. crowdfunding pools small contributions from many people, which is also external money but usually tied to a campaign and public interest rather than a single source of capital.