Which of the following statements about bootstrapping is accurate?

Which of the following statements about bootstrapping is accurate?

• A. It relies on external investors for funds
• B. It requires personal investment from the owner
• C. It involves using loans from banks
• D. It demands a strong credit score from the owner

Answer: (B)

Bootstrapping is a technique often used by entrepreneurs to start and grow their businesses with minimal external funding. This approach emphasizes the use of personal resources, which may include personal savings, contributions from family and friends, or reinvested profits from the business itself. By relying on personal investment, the owner maintains greater control over the business and avoids debt and equity dilution. The other options suggest reliance on external sources of funding, such as investors or loans, which contradicts the fundamental principle of bootstrapping.

Bootstrapping is a technique often used by entrepreneurs to start and grow their businesses with minimal external funding. This approach emphasizes the use of personal resources, which may include personal savings, contributions from family and friends, or reinvested profits from the business itself. By relying on personal investment, the owner maintains greater control over the business and avoids debt and equity dilution.

The other options suggest reliance on external sources of funding, such as investors or loans, which contradicts the fundamental principle of bootstrapping.