BOOTSTRAPPING – Green Tech Explorer

I have been visiting many start-ups since the beginning of July and I was surprised by the number of start-ups that was financed without any external support. In entrepreneurship class, Venture Capital and Business Angels are best practices and seem to be the norm. Reality is different… 

I made some research and quickly found out that less than 2% of start-up are backed by VC or Business Angels. So how do you maintain your business development while ensuring a sustainable cash level? One of the most famous strategy is called “Bootstrapping”.  Bootstrapping is related to the lean start-up concept and means to be founded without the help of external capital.  Cash generated by your growth should support your development.

In class, I found this concept quite straight-forward and logical. Nevertheless, I only realized how difficult it was to adopt this strategy when I met Christophe Meunier Jacob, founder of Eiver, a mobile app that rewards driver’s good behavior.  So far, it is the best practice of Bootstrapping that I have seen. To make a long story short, Christophe had a B2C business model idea, but it was costly to start directly with B2C as it would have required either big marketing investment or a paid app that would also require investment to deliver enough value to end-consumers. 

Christophe decided to bootstrap in order to auto finance his start-up while maintaining his long-term vision. To do so, he decided to start the app concept with an MVP (Minimum Viable Product) oriented B2B. He managed to sell the product as an OEM to big automotive brands. This is how he could finance his long-term but initial vision of B2C App. 

So shall start-up always rely on this strategy?

As we learn during MBA, the best answer is often “It depends”

I looked at some literature to identify pros and cons of this strategy: 

Advantages of Bootstrapping 

  • Controlling Decisions and Timeline: No external pressure on your decision-making and no alteration of your vision
  • Maintain your Ownership: No dilution of your equity  
  • Have a concrete sustainable business plan: Not relying on risky IPO, not targeting a potential exit, but building a cash machine that helps scaling the future
  • Multi-generational Business with long-term mission: No pressure for early exit from investors. 
  • Your own achievement: You can be proud of yourself. You build it by yourself. 


  • Slower Business development: External investments fastens your market implementation (Sales force, Marketing etc…)  and the scalability of your company. 
  • Minimizing chance of surviving: Cash might become the bottleneck in your growth strategy and alter your sustainability
  • Networking: Other advantage of outside capital is the network and knowledge brought by new investors. 
  • More resources, better organization: Easier to stay focus on business development and organize clear processes 
  • More effort, less talent: Incentivized to preserve your cash, you will have limited resources for recruiting and outsourcing. 

To conclude, my feeling is that bootstrapping remains a good alternative for business where entrepreneurs have limited timing-pressure and no capital-intensive ideas. On the other hand, if first mover advantage is a keystone to succeed – such as a platform business model – external capital might be critical to gain market share and stay strong. 

For more information on Bootstrap guidance, I recommend the following article:

Michel Noujaim – Green Tech Explorer 

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