Difference between Bootstrap funding and investment funding

Back in the old days, people with innovative business ideas shy away from making it happen. Too bad because they just let it rot inside a box. Now here comes the digital age! Almost everybody who has a jolt of killer ideas tends to rush things and announce it to the whole world wide web even before they have a concrete thought of how to turn it into a reality. Just when their excitement level subsides, the most important question arises— how would they finance these killer ideas?!

Come to think of it, perhaps this is the very same question people with super awesome business ideas had back in the days. The only difference now is that there’s still hope. There is no need to keep it hidden. All thanks to the digital era where communication and information are at their best hence making every business opportunities count more than ever.

We know how hard it is for an aspiring entrepreneur to think of how he is going to fund his startup especially at the early stage, where revenue is yet to be seen. If you are that person, allow us to share with you these funding options so you can continue to pursue that exciting yet rough road of entrepreneurship.

Bootstrap Funding

There is no business-minded individual who has not yet encountered this term— bootstrap funding. It often pops up whenever business financing is talked about. Do you want to know a bit of trivia? The term “bootstrapping” have originated in the early 19th-century particularly in the phrase “pull oneself over a fence by one’s bootstraps” to mean an absurdly impossible action.

Now, that’s interesting, right?

Going back to business, bootstrap funding is when a budding entrepreneur attempts to build a business or startup with his very own personal finances, and without the need for external funds.

Investment Funding

Do you love watching a business-related television show? I asked because if you are familiar with the show “Shark Tank”, (yes, this time I remembered it!) then it pretty sums up what investment funding is.

Mark Cuban, Barbara Corcoran, Kevin O’ Leary, and other big names in the industry, they are the angel investors, venture capitalists, and outside shareholders included in the show. Just like them, you can find investors who are willing to shoulder an amount of money for your business idea. Why in the world would they do that? Simple, because in return of their invested capital on your startup, you will not be the only one to decide on your business operation— they will want to have a part of your business.

Hold it right here! We will not just drop these two funding options for you to try. We know there are differences between these two so please keep on reading up to the end of this post, it will help you to come up with a decision on which one to pursue.

Difference between Bootstrap Funding and Investment Funding

Bootstrap Funding

• You are your own boss.
• You’ll have more freedom in decision-making.
• Focused on one-clear goal with no interference from investors.
• Start with a small capital. Frugality is imperative.
• The approach is to make money as soon as possible to finance the business. Opt for a simple invoice template generator, if I must say.

Investment Funding

• Huge initial boost for growth and expansion.
• You lose sole ownership of your business.
• Financial freedom to pursue business interests.
• You’ll need the investor’s approval for every business decision you make.
• You’ll get brilliant ideas and expertise from your investors.
• The approach is to come up with decisions from investors on how to spend money with their invested funds.

If you fully trust your gut about your business idea, and with these two funding options we gave to you for your perusal— the decision is up to you. As a budding entrepreneur, you need to start on the right path. Be resourceful. Weigh all the pros and cons. Aim for success.