Paper Authors

Abstract

NOTE: The first page of text has been automatically extracted and included below in lieu of an abstract

Study of Financial Bootstrapping Techniques

ASEE Abstract

Study of Entrepreneurial Financial Bootstrapping Techniques

Abstract

Financial bootstrapping is a little explored and understood area of entrepreneurial financing that needs to be investigated in an academic setting so that it may become a viable alternative for those who are planning their own start up ventures but do not have access to large amounts of traditional financing sources. The paper will focus on the techniques used in entrepreneurial start up firms to obtain forms of financing that are not the traditional debt loans or owner supplied capital. The paper will address the published data in the area of financial bootstrapping to assess where the academic community has progressed at this point in time in their understanding of the techniques. The paper will then draw conclusions of where future research needs to head in order to get a better understanding of this important financing technique.

Introduction

Financial bootstrapping is a technique used by many entrepreneurs to finance the business in the early startup phase when access to traditional forms of capital such as debt and equity are limited or non existent. Many entrepreneurs must rely on their own cunning and imagination to finance the business at the start. The entrepreneur is said to pull themselves up by the “bootstraps” when using creative techniques to finance the business.

Definition

Lynn Neeley defines bootstrapping as: “ a variety of ingenious methods that find resources, maximize their efficient use, and minimize the explicit costs associated with using these means whether they are found inside the business, obtained from other people, or provided by other companies and organizations” 3. This definition is common throughout the literature in one format or another and will be used here as a basis for the paper. The key phrases in the definition are maximize use, minimize cost, and ingenious methods of finding resources. These attributes of an entrepreneur are born out of necessity due to their lack of access to traditional capital markets enjoyed by large or well established businesses. It is what helps set apart the entrepreneur from people who conduct business on behalf of large or well established companies. The entrepreneur is a risk taker by necessity as will be evident from a discussion of the techniques employed to find resources.

Influencing Factors on Financing Decisions

• Citation

• Format
  • APA
  • APA - LaTeX bibitem
  • MLA
  • MLA - LaTeX bibitem
  • Bibtex
  • EndNote - RIS

Stephens, J., & Iskandarani, M. (2006, June), Study Of Entrepreneurial Bootstrapping Techniques Paper presented at 2006 Annual Conference & Exposition, Chicago, Illinois. 10.18260/1-2--151