Entrepreneurs rarely possess all of the financing necessary to achieve desirable outcomes. As a result, they must often be creative in financing and operating their new ventures. These creative actions, collectively, are termed bootstrapping. The literature, though, is unclear as to whether this ultimately has a negative or positive impact on performance and survival. This worked examines the relation between bootstrapping activity and performance/survival on a large longitudinal sample of new firms. Findings indicate the relation depends upon whether the entrepreneur is pursuing profitability, growth, or simply survival. With regard to the latter two, bootstrapping is generally negatively associated with desirable outcomes. However, with regard to profitability, bootstrapping activities are actually positively associated.
Rutherford, Matthew W.; Coombes, Susan M.T.; and Mazzei, Matthew J.
"THE IMPACT OF BOOTSTRAPPING ON NEW VENTURE PERFORMANCE AND SURVIVAL: A LONGITUDINAL ANALYSIS,"
Frontiers of Entrepreneurship Research: Vol. 32
, Article 4.
Available at: http://digitalknowledge.babson.edu/fer/vol32/iss12/4