| > let's say a billionaire puts his 1B$ into a new venture, would you call that "boostrapping" as well? Depending on how he got the billion and whether or not there is outside investment involved, possibly yes, but the term is usually used for small amounts of money (say < $100k or so). But that's a technicality. But truth be told very few people are in that luxurious position and those that are will almost never risk all (or even a substantial part) of their private capital on an entirely new venture. So that's highly hypothetical and would take the better part of several decades before you'd be in a position to execute that phase of your bootstrap. Elon Musk comes close but even he routinely uses outside capital and so is not really bootstrapping (though I'm not aware of anybody else that is so willing to put most or all of his own money into new ventures). Bootstrapping comes from the imagery of pulling yourself up by your bootstraps. You come into the world naked, without substantial inherited money, you become employed somewhere, you save some money, maybe do some side jobs, one day you jump ship and go full time into your own business and your savings provide your runway. That's the textbook definition of a bootstrapped business. It tends to produce small to mid-sized companies ($100K to $10M) in revenues and anywhere from one to 50 or so employees. It's the most sure-fire path to any kind of independence for skilled workers and has a totally different risk profile from a business that takes on outside investment. (Larger risks of failure, potentially larger returns) |
(Once again, let me re-iterate that I have understood that "my" definition of boostrapping is not correct)
To me, a billionaire going all out on a new project is in a better financial, business & social position. "hey look, Elon Musk has launched a new thing, took his own billion to build it, must be awesome like his past ventures" compared to "hey, here is that John Doe we never heard of with his project he built in his home. To me, with financial capital comes social capital. When you invest all your money in a project, if it's 1B$ your social status "highly affluent guy with connections up to the white house and every Fortune 500 companies" does not change and is immensely useful. If it's your 5k€ your social capital is low and will get from "successful salaried software developer" to "the noodles-eating guy who didn't have a shower in 4 days". Guess which one is most likely to win deals?