Chapter 12: Bootstrapping and Crowdfunding for Resources

Question 1

What is bootstrapping?

Answer 1

Self-funding a business using personal resources, revenues, or sweat equity.

Minimizing expenses by using shared resources (office spaces), or leveraging personal networks for early support.

Question 2

What are the benefits of bootstrapping?

Answer 2

Retain full control of the business + develop resourcefulness and discipline in managing finances.

Question 3

What is crowdfunding?

Answer 3

Raising funds from a large pool of individuals, typically from online platforms (Gofundme)

Question 4

What are the models of crowdfunding?

Answer 4

1. Patronage
   Donors contribute without expecting returns
2. Reward-Based
   Backers receive perks or products
3. Lending-Based
   Loans are repaid with or without interest
4. Equity-Based
   Backers receive shares in the business.

Question 5

What are the trade-offs between bootstrapping and crowdfunding?

Answer 5

Bootstrapping offers control but limits resources.

Crowdfunding requires community engagement but can provide validation and market exposure.