The whole idea of entrepreneurship is driven by the force of innovation, the ability and willingness to convert the ideas to successful and profitable enterprise.
For every start-up, money may not be the sole objective. During the setting up of a venture, one needs to decide what the capital source shall be , for their initial investment – whether to bootstrap or to seek external funding. This critical decision often determines the chances of the success, scale and long term prospects of the enterprise.
We present to you the various available options for the budding entrepreneurs and the new start-ups.
Bootstrap
In today’s edition, we shall be talking about bootstrapping.
An entrepreneur is said to be boot strapping when he or she attempts to found and build a company from personal finances or from the operating revenues of the new company.
An entrepreneur starts off with self finance and may use other options like sweat equity, minimization of liabilities and accounts payable, minimizing inventory, subsidy finance, personal debts, etc.
Pros:
- Less dilution of ownership.
- Creative control.
- Controlled scaling up
- Smarter decisions
- Faster progress
- Better profit margins
- Lesser outer influences
Cons:
- Higher risk factor
- Hiring cheaper talents and paying for their mistakes.
- Poor beta product/service version.
NIET E-CELL 