Which term describes a startup funding approach that relies on the founder's own money and resources?

Which term describes a startup funding approach that relies on the founder's own money and resources?

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

Answer: (B)

Bootstrapping describes funding a startup with the founder’s own money and resources, without seeking external investors. This approach keeps ownership and control in the founder’s hands and often requires careful cash management, reinvesting early profits, and prioritizing what can be funded internally. It contrasts with incubation, which provides support and resources but not personal funding; crowdfunding, where money comes from many individual contributors; and venture capital, which involves external investors providing funds in exchange for equity. Bootstrapping is the best fit here because it directly describes using personal funds and resources to start and grow the business.

Bootstrapping describes funding a startup with the founder’s own money and resources, without seeking external investors. This approach keeps ownership and control in the founder’s hands and often requires careful cash management, reinvesting early profits, and prioritizing what can be funded internally. It contrasts with incubation, which provides support and resources but not personal funding; crowdfunding, where money comes from many individual contributors; and venture capital, which involves external investors providing funds in exchange for equity. Bootstrapping is the best fit here because it directly describes using personal funds and resources to start and grow the business.