Which practice is defined by launching a startup using the founder's own money and resources rather than external capital?

Which practice is defined by launching a startup using the founder's own money and resources rather than external capital?

• A. Venture Capital
• B. Bootstrapping
• C. Incubation
• D. Licensing

Answer: (B)

Bootstrapping means starting a business with the founder’s own money and resources, rather than seeking outside capital. This approach keeps full ownership and control in the founder’s hands because no external investors take equity or influence decisions. It also pushes tighter cash management and a lean, revenue-driven approach since growth must come from savings or early profits. The trade-off is that growth can be slower and the personal financial risk is higher. In contrast, venture capital relies on external funds from investors, incubation programs focus on support and mentorship, and licensing is about monetizing IP rather than funding strategy.

Bootstrapping means starting a business with the founder’s own money and resources, rather than seeking outside capital. This approach keeps full ownership and control in the founder’s hands because no external investors take equity or influence decisions. It also pushes tighter cash management and a lean, revenue-driven approach since growth must come from savings or early profits. The trade-off is that growth can be slower and the personal financial risk is higher. In contrast, venture capital relies on external funds from investors, incubation programs focus on support and mentorship, and licensing is about monetizing IP rather than funding strategy.