Bootstrapping techniques in startups aim to preserve the idealism of startup founders, shift the business core flexibly, and focus more on the product.
Heaptalk, Jakarta — Establishing the startup company does not solely depend on investors’ capital injection. Creating the business and obtaining the early capital can also be achieved through the Bootstrapping technique.
Bootstrapping is the strategic method of elevating the startup by reckoning the existing resources and own strength, specifically in terms of the capital side. The capital comes from private sources without taking a loan from external parties.
Through this scheme, the sustainability of the startup business is maintained by relying on income from the company is run. This method was selected because startup founders do not intend to share equity or lend capital in large amounts from banks.
Generally, businesses that implement the bootstrap method rely more on internal sources of financing, mortgages, and credit cards. As an effect, the founders have limited finance access, entailing the startup founders to allocate the capital seemly and accurately.
After apprehending the meaning of this technique, the startup founders also need to grasp the function of Bootstrapping method. The aims include maintaining the idealism of startup founders, shifting the business core flexibly, and focusing more on the product.
Bootstrapping will become an adequate method for enhancing the business continuity of startups. To be more familiar with this scheme, the following are several stages of Bootstrapping according to Alpha JWC Ventures:
1. Beginner stage
During this step, this business development method is commenced with savings, loans, or investment utilization from close relatives, friends, or working companions. In this case, the startup founders can still do their everyday work while starting a business.
2. Customer-funded stage
When the business grows, customers or clients also begin to increase. The funds originating from customers can be used to maintain business continuity to continue operating and growing.
3. Credit stage
Startup founders start taking loans for additional business capital in this credit stage. Commonly, this move is performed when business practitioners aim to expand their business. The business capital obtained is used for various purposes, including employee augmentation and the production tools’ quality improvement.
