Bootstrapping refers to a funding strategy which involves a founder, or founders, using their own money to fund a new company. They avoid relying on outside investors. The organization tightly controls spending of funds to avoid having to dilute ownership through issuing equity or to take on debt.
Bootstrapping enables founders to retain ownership until they have reached a point of development that will place a higher value on the business. This enables the founders to raise more funds with a smaller share of ownership. Some businesses find that they can bootstrap the organization’s growth to the point that the business is self-funded – sales, profits, and cash flow fund future growth.