You've probably heard the phrase "pull yourself up by your bootstraps.” It's been around for more than 100 years, but it has also evolved into another term that a lot of startups (especially tech startups) use to describe the way that they get off the ground and grow.
In the old days, pulling yourself up by your bootstraps basically meant that you succeeded at something when you started out with nothing. Today, “bootstrapping” refers to when a company is using its own resources to grow. Those resources could be labor, they could be money saved by the founders, they could be loans from family and friends, they could even be profits the company has earned that it reinvests. These resources can be used in many different ways, such as purchasing equipment, investing in research and development or hiring labor.
If a startup isn't bootstrapping, they are probably intentionally and strategically looking for outside funding, usually from private “angel investors” or venture capital companies, who invest in the hope that the company will grow and earn a profit, of which the investors will get a share. This arrangement is a far different type of situation than when a company is bootstrapping.
Most of my clients are bootstrappers. I've been bootstrapping with my business for 15 years.
One of the most important concepts of bootstrapping is to hire smart and make sure you spend your money well. I can help you along these lines. Call me at Taylor Legal: (410) 420-4075, or find me online at taylorlegal.com.
KATHERINE L. TAYLOR, ATTORNEY AND CPA
5850 Waterloo Rd