Starting a business is quite straightforward at first. You have a big idea, you believe in it, understand its potential, and you start working to bring that idea to life. But there’s one important question that often comes up early in the process. Should you build your startup with your own money and resources, or should you seek outside funding to accelerate growth?
This decision can shape everything from your pace of development to the kind of business you build and how much control you keep. Both bootstrapping and funding come with their own pros, cons and considerations. Let’s take a closer look at each approach, along with some helpful insights to guide your decision.
What Does Bootstrapping Mean?
Bootstrapping means building your startup using your own savings, early revenue or support from friends and family. Many people choose this option when they want to bootstrap a startup without relying on investors or loans.
The upside? You keep full control. The downside? Progress can be slow, especially if your idea is technically complex.
Some founders work with a digital venture studio to get access to development resources without raising money too early. This model helps build a solid MVP without large upfront costs.
What Is a Funded Startup?
Funded startups raise capital from angel investors, venture capitalists or through startup accelerator programmes. This approach can provide the cash flow needed to hire a team, build a full product and take it to market quickly.
According to a report by Royal Academy of Engineering, in the first half of 2024, UK deep tech companies raised £3.6 billion in VC funding, with both the Artificial Intelligence and Healthcare sectors each attracting over £1 billion.
Startups that aim to raise seed funding with an MVP typically work with professionals who can deliver investor-ready MVP development. This helps demonstrate credibility and traction during funding rounds.
Pros of Bootstrapping
1. You Keep Full Control
Bootstrapping allows you to retain 100 percent of your equity. You make all the decisions without investor input. If staying in control matters to you, bootstrapping is the ideal approach.
2. Profit-First Thinking
When you don’t have outside capital, you focus on making money early. Many founders start with a MVP on a budget, which allows them to validate demand before expanding.
3. Grow at Your Own Pace
Without pressure from investors, you can take time to learn from your market and grow organically. If you’re still refining your concept, this approach is far less stressful.
Some bootstrapped founders also use services like co-founder as a service, helping them access technical talent and strategy while staying lean.
4. Keeps You Grounded
Bootstrapping encourages discipline. It forces founders to build lean, work hard and focus on solving real problems. This practical mindset often leads to better long-term outcomes.
Cons of Bootstrapping
1. Limited Resources
Building on a tight budget can be tough. You may not be able to afford experienced developers or marketing support. Hiring a technical co-founder for hire is one way to fill the gap without giving away equity.
2. Slower Development
Without capital, it may take longer to bring your product to market or improve its features. Time becomes your biggest constraint.
3. Financial Risk
When you bootstrap, you put your own finances at risk. That can be challenging if the business takes longer than expected to generate revenue.
Pros of Getting Funded
1. Speed and Scale
With capital in hand, you can build faster, launch earlier and scale confidently. Many startups work with a startup builder partner to combine technical development with business support from day one.
2. Strategic Guidance
Investors bring more than just money. They often offer connections, experience and accountability. Many also refer startups to startup funding support services to strengthen pitches or operational strategies.
3. Access to Talent and Tools
With the right funding, you can hire top talent, use premium tools and refine your processes early on—without waiting for revenue to catch up.
4. Room to Take Bigger Risks
With financial backing, you have the freedom to explore ambitious goals and bold ideas. You can experiment more without worrying about every dollar spent.
Cons of Getting Funded
1. Giving Up Equity
When you take investment, you give up part of your company. This means sharing profits and, in some cases, giving up decision-making power.
2. Pressure to Perform
Investors expect returns. They want to see rapid growth, clear milestones and successful outcomes. This pressure can lead to burnout or poor decisions made in a rush.
3. Risk of Dilution
As you raise more funding rounds, your ownership stake can shrink significantly. Some founders end up with only a small piece of the company they started.
How to Decide Which Path Is Right for You
There is no single formula for success. The right approach depends on your goals, your business type and your personal preferences. Here are some helpful questions to consider:
- Can you build and test your idea without large upfront costs?
- Do you want to stay independent and in control?
- Are you entering a market where speed is critical?
- Do you have access to networks that could help you raise funds?
- Can your product generate early revenue, or will it take time?
Each answer can point you in a different direction. Many founders also switch paths over time. You might start bootstrapped, then raise funding once you have traction. If you’re building a technical product but lack a development background, hiring a technical co-founder for hire or partnering with a venture builder for startups can offer a smart hybrid approach.
Hybrid Approaches
Some founders choose a mix. They start by bootstrapping, gain some traction and then raise funds later when they have a proven product and customer base. This can help them keep more equity and get better terms from investors.
Others use alternative funding options like:
- Revenue-based financing
- Crowdfunding
- Government grants
- Startup accelerators
These can provide capital without giving up too much control.
Comparison Table: Bootstrapping vs Funding
| Scenario | Bootstrapping is better when | External funding is better when |
| Idea Stage | You are experimenting or building an MVP on a budget. | You have a working prototype, early traction and are ready to scale. |
| Cash Needs | You can build the product and get initial customers with low costs. | Your product needs heavy investment upfront (e.g. hardware, R&D). |
| Control Preference | You want full control over decisions | You are open to bringing in partners and outside advice |
| Speed Goals | You’re fine growing slowly and sustainably | You need rapid development with support from a venture builder for startups |
| Experience Level | You’re experienced or have a technical co-founder | You need guidance from startup funding support services or co-founder as a service providers |
Final Thoughts
There is no right or wrong way to build a startup. Some of the most successful companies in the world bootstrapped for years before reaching fame. Others raised millions early and scaled fast. What matters most is staying true to your vision, understanding your needs and making informed choices.
You can always seek expert support through a digital venture studio or explore flexible setups like co-founder as a service. If your idea requires fast execution or you need resources that are out of reach, raising funding might be the smarter option. Just be sure you’re ready with a clear product, business plan and, ideally, an investor-ready MVP.
No matter which path you choose, stay focused on building something meaningful. Solve real problems. Deliver value. And keep moving forward.