The Use of Bootstrapping by Women Entrepreneurs in Positioning for Growth
(with Nancy M. Carter, Elizabeth J. Gatewood, Myra M. Hart)
The number of women entrepreneurs is rising rapidly and many are creating substantial businesses. For most women-led ventures, growth is funded by personal investment and debt, although a small percentage draw on private equity investment to fuel high growth. Of those that seek growth, not only do they face higher obstacles in obtaining capital, but little is known about ways they position ventures for growth. This paper addresses the question: 'How do women develop financing strategies to prove the business concept, meet early stage milestones, and demonstrate to external investors the value and potential of their businesses?' Data are drawn from phone interviews with 88 US female entrepreneurs seeking an equity investment to grow their businesses. The analysis examines the correspondence between bootstrapping and stage of business development. Results show significant differences in the use of bootstrap options utilized by women-led ventures depending on stage of business development. Companies that have not achieved sales were more likely to emphasize bootstrapping to reduce labour, while those companies with greater sales were more likely to minimize cost of operations. Implications for future research and education are suggested.