BachanK-BUSN621-Midterm.docx - Why is bootstrapping important for(a closely held companies and(b early-stage high-growth companies seeking equity

BachanK-BUSN621-Midterm.docx - Why is bootstrapping...

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Why is bootstrapping important for (a) closely held companies and (b) early-stage, high-growth companies seeking equity investors? According to Entrepreneur.com's writer, Patel, he defines bootstrapping as starting up your company and the growth of it by investments and inputs (Patel et al, n.d.). It is becoming one of the most effective and inexpensive ways to ensure positive cash flow for the business (Patel et al,n.d.). Campbell of Small Biz Trends defines it as “Bootstrapping is when a company is starting up with either no money or very little money. They rely on angel investors and seed money (Campbell, 2018).” Bootstrapping would be important for closely held companies because it is not asking them to sell a portion of their company so that the money can come in. Instead investors will investor andwhen there is profit, they will receive their return on investment. Companies that are in the early stages and are high growth, bootstrapping is important for them as well. Equity investors are looking for something that will make their return on investment worth the risk. The risk is lower on a high growth company because there is already growth, so the money will just be used to do certain things that keep operations going such as hiring more people or doing some in house things that need to be completed, which can be updating policies and manuals, which could require a lawyer to make sure that the documents are compliant with the law of the state. ReferencesCampbell, A. (2018, May 22). What is Bootstrapping? Retrieved from Patel, D., Onibalusi, A., & Rampton, J. (n.d.). Bootstrapping Definition - Entrepreneur Small Business Encyclopedia. Retrieved from Why do stakeholders view the social venture differently from a traditional venture?Social ventures are movements raise awareness for change in a positive light. An example of thisis the shoe company – Toms. When Toms first came out, the marketing for it was “Buy a pair. Give a pair.” When you buy one pair of Toms, the company gave a pair of shoes to someone in need in places where shoes are greatly needed, such as Africa.
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