Bootstrapped vs Funded Ventures: The Pros and Cons
                     BOOTSTRAPPED VS FUNDED VENTURES: 
THE PROS AND CONS
Bootstrapped Ventures
• Bootstrapping is when an individual(s) attempts to found and build a 
business with his or her own personal finances and without external funding.
Source: invoice.ng
Funded Ventures
• Venture capital funding is when funding is put into a new business venture by 
venture capitalists, such as angel investors or a venture capital firm, which is 
given as an investment in exchange for equity in a business.
Source: invoice.ng
PROS OF BOOTSTRAPPING
Ownership of Your Business
• As a solo entrepreneur bootstrapping means you can continue to own 100% 
of your business. 
• Even with a co-founder or two, your share of the equity is going to be far 
larger than if you go through multiple rounds of fundraising.
Source: www.forbes.com
Control Over Direction
• As soon as you take outside money you take on exterior pressure and 
responsibility to satisfy other people’s interests. Those may be very different 
from your vision.
Source: www.forbes.com
CONS OF BOOTSTRAPPING
Chances of Survival
• One of the top reasons for business failure is running out of money. It’s cash 
flow shortages. 
• Though, if you run into a crunch for just a month or two you may never 
realize the potential of your startup.
Source: www.forbes.com
Growth
• The main reason that entrepreneurs go out to fundraise lots of capital is to 
scale big and fast. For many that is their strategy to survive and thrive.
Source: www.forbes.com
PROS OF FUNDED VENTURES
Financial Resources
• External funding provides businesses with a lot of financial resources which 
lead to faster growth of the company. 
• Experienced investors also act as mentors for the young entrepreneurs and 
are there to guide them through tricky situations.
Source: invoice.ng
Networking
• In addition to this, their network of industry contacts helps the startup in 
earning much-needed credibility. 
• Funded ventures are entirely focused on developing the business and can act 
as an effective starting point for introducing the product in a market.
Source: invoice.ng
CONS OF FUNDED VENTURES
Claim over the company
• Funded ventures come with their own set of cons, the primary one being 
that the business owner loses a considerable claim over the company.
Source: invoice.ng
Restrictions
• the variety of restrictions on payments, equity, and decision-making 
drastically limits the scope of the founders. 
• So, instead of owning a business, the founders end up owning just a smaller 
portion of a much bigger pie.
Source: invoice.ng