What is Bootstrapping?

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In today's episode, we'll cover bootstrapping for entrepreneurs basically this means how you start and grow a business with your own resources, followed by an explanation of business funding terms, and concluding with ten open questions around bootstrapping, funding sources, expenses, and stock options.

During one of our live, online Business English sessions, we discussed a short video titled "How do You Fund Your Business Before Investment." The video, featuring Wil Schroter - CEO & Founder of Virtucon Ventures - talks about different techniques to kickstart your business before seeking external investment.

Bootstrapping is a term used in business to refer to the process of using only existing resources, such as personal savings, personal computing equipment, and garage space, to start and grow a company.

The video explains that most entrepreneurs have to figure out how to start and grow their business with limited resources. This is where the concept of bootstrapping comes in handy. Bootstrapping involves using your own expertise, moonlighting in your current occupation, and turning to personal sources like credit cards or a home equity line to cover expenses. By doing so, entrepreneurs can focus on growing company without worrying about external investors and investment returns.

If you want to learn more about bootstrapping and different ways to fund your business before investment, we highly recommend watching this informative video. You can find the link to the video in the show notes.

Alright, let's delve into some vocabulary explanations that will help you better understand the context of this video.

• First up, we have "own resources." This refers to any funds or assets that an individual or business has access to, such as personal savings or property.
• Moving on, we have "investors." These are individuals or organizations that provide financial support to a business in exchange for ownership or a share of the profits.
• Next, we have "outside capital." This refers to funding that comes from sources external to a business, such as loans from a bank or investments from venture capitalists.
• Now let's talk about "bootstrapping a business." This term refers to starting a business with little to no external funding, relying instead on personal savings and hard work to get the business up and running.
• Another term you may have heard is "moonlighting" This means working a second job in addition to your primary job in order to earn extra income.
• We also have "home equity lines," which are loans that use the equity in a person's home as collateral.
• Moving on, "to cover expenses" means to pay for the costs associated with running a business, such as rent, salaries, and supplies.
• Last but not least, we have "burning through cash." This means spending money quickly and at a high rate, often leading to financial difficulties if not managed properly.

So there you have it, some key vocabulary that will help you better understand the concepts discussed in this video.

10 thought-provoking open questions we have for you to discuss with your colleagues based on today's video topic ...

1. Have you ever considered venture capital for your business?
2. Do you know what percentage of companies actually have outside investment upon launch?
3. As we all know, starting a business can be a hard task, and that's why most entrepreneurs tend to moonlight in their current occupations. Have you ever wondered how this helps entrepreneurs in funding the early days of their business?
4. You may have heard the term "bootstrapping" before, but do you know what it actually means and how entrepreneurs do it?

Now, let's take a short break to consider and brainstorm answers to these questions.

1. How does giving out stocks in the company help entrepreneurs create capital?
2. What are some personal sources that entrepreneurs turn to for funding?
3. As an entrepreneur, there are some expenses that you need to cover yourself long before you need investors.
   1. What are these expenses, and how can you plan for them?
4. Last but not least, what can entrepreneurs do to start bringing in income as they launch their business?

Share your thoughts and have a constructive discussion with your colleagues.

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