Bootstrap Finance among Entrepreneurs, Which Techniques They Use?

Abstract

Bootstrap finance is regarded as an alternative method to fulfill the need of capital for the entrepreneur. This method is preferably used since compared to the traditional one. It has many advantages. The most notably is that it does not have to meet institutional requirements or market obligation, compared to if they use traditional way of financing. This is particularly true for small and medium firm which have a limited access to formal channel of financing such as credit market or attracting angel investor. The purpose of this study is to identify the techniques of bootstrapping commonly used by entrepreneur as well as to explore how intense they make used of them. Using 36 small and medium firms in Surabaya, Indonesia as a sample, the result indicates that managing cash and assets is the most frequently used method for entrepreneurs in order to fulfill their necessity of capital. The techniques for this category include coordinating a purchase with other businesses, requiring. This study will benefit entrepreneurs who want to initiate a new venture or business to understand various alternative of financing outside the conventional ones