# What does bootstrapping mean?

> Bootstrapping means building a business without investors, funded by your own money and revenue. How it differs from venture funding, and what to track.

**Bootstrapping**: Bootstrapping is building a business without outside investment, paying for it from the founders' own money and the business's revenue.

Bootstrapping is building a business without outside investors, paying for it from your own savings and, as soon as possible, from what customers pay.

## The short definition

A **bootstrapped** business has no outside investors. The founders pay for it with savings, a day job or freelance work, and then with the business's own revenue. The name comes from the old phrase about pulling yourself up by your own bootstraps.

The opposite is a **funded** startup, which sells shares to angels or venture capital firms in exchange for money to grow faster than revenue alone would allow.

## Bootstrapped vs funded

| | Bootstrapped | Venture funded |
| --- | --- | --- |
| **Who owns it** | The founders | Founders and investors |
| **Money to grow** | Revenue | Investment, then revenue |
| **Pace** | As fast as revenue allows | As fast as possible |
| **Pressure** | Customers | Customers and the board |
| **What success looks like** | A business that pays you | A large exit or IPO |

Neither is better. Funding makes sense when a market rewards getting big first; bootstrapping when a profitable niche is the goal. Many [indie hackers](https://makerhandle.com/glossary/indie-hacker) and [micro SaaS](https://makerhandle.com/glossary/micro-saas) founders bootstrap by choice.

## The numbers a bootstrapper lives by

Without investors, revenue is the fuel, so the numbers are simple and unforgiving:

- **Revenue and [MRR](https://makerhandle.com/glossary/mrr)**: whether the business pays for itself yet.
- **[Runway](https://makerhandle.com/glossary/runway)**: how many months your savings and revenue cover your costs.
- **[Churn](https://makerhandle.com/glossary/churn-rate)**: a leaky bucket matters more when there is no investment to refill it.

Paul Graham's essay "Default Alive or Default Dead?" asks the bootstrapper's question in one line: on current growth and costs, does the company reach profitability before the money runs out?

## Showing a bootstrapped business

Bootstrapped founders often share their numbers in public, partly for accountability and partly because it is good marketing. The trusted way is a figure read from the payment provider, not a screenshot. makerhandle shows [verified revenue](https://makerhandle.com/features/verified-revenue) from Stripe, Paddle, Lemon Squeezy, Gumroad, RevenueCat or Shopify next to each product. See [makerhandle for solo founders](https://makerhandle.com/for/solo-founders) and [how to build in public](https://makerhandle.com/blog/how-to-build-in-public).

## Sources

- [Paul Graham: Default Alive or Default Dead? (October 2015)](https://paulgraham.com/aord.html)

## Questions

### What does bootstrapped mean for a startup?

It has no outside investors. The founders pay for it from their own money and, as soon as they can, from revenue.

### Is bootstrapping better than raising money?

Neither is better in general. Bootstrapping keeps ownership and control; funding buys speed in markets where size wins.

### Can a bootstrapped company raise money later?

Yes. Some bootstrap until they have revenue and then raise on better terms; others never raise at all.

### What should a bootstrapped founder track first?

Revenue, monthly costs and runway, then churn once there are paying customers.

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Source: https://makerhandle.com/glossary/bootstrapping
makerhandle: makerhandle is a link in bio for makers and founders: every project with its status and revenue verified from Stripe, Paddle and more.