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Saturday 2 February 2008

Bootstrap and reinvest

Bootstrapping isn’t so much a single fundraising technique, as it is a ‘do it yourself’ mindset of leveraging what you earn back into growing your business. Entrepreneurs engaged in bootstrapping take very little of the company profits out of their business early on, and instead use those funds in lieu of a formal bank loan or venture capital. If you are anxious to quickly expand your domaining portfolio and can afford to live without the immediate profits, consider leaving all or most of your profits in the business to leverage new purchases. Bootstrapping is the poor entrepreneur’s way to compete against larger competitors, because by reinvesting their gross profits back into the business, bootstrappers gain a return which is functionally equivalent to compound interest

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