Every startup is faced with a choice: develop a business using your own funds (bootstrapping) or attract venture capital financing (VC – venture capital). Both approaches have their pros and cons. Let's figure out which option is best suited for your company.

Bootstrapping is the development of a startup without external financing, using the founders' personal funds and income from the first clients.

• Full control – the founders make all decisions without investor pressure.
• Flexibility – there is no need to meet the expectations of venture funds.
• Profit focus – self-funded startups gain ground faster.
• Minimal risks of dilution of the share – no one takes part of the company.

• Limited resources make it harder to scale without a lot of investment.
• High financial burden – founders have to invest personal money.
• Slow growth – without external capital, the development process takes longer.

Venture capital investments are the raising of money from foundations, business angels, or corporate investors in exchange for a stake in a company.

• Rapid scaling – you can immediately enter new markets and actively develop the product.
• Access to experts and connections – investors help not only with money, but also with experience.
• A higher valuation of a startup company with investments often earns a higher market value.
• There are more opportunities for innovation – you can experiment with products and business model.

• Dilution of the share – the founders lose some control over the company.
• High expectations – investors demand fast results and growth.
• The risk of losing business is that if a startup does not meet expectations, investors may change management.

The choice between bootstrapping and venture capital investments depends on several factors. If a startup can generate profits from the very first days, it is better to choose bootstrapping. If scaling and rapid growth are required, venture capital investments may be a good option.

Bootstrapping startups often develop more slowly, but retain full control. Companies with venture capital are growing faster, but they have to meet the expectations of investors.

Some successful startups initially developed without external financing. Basecamp, Mailchimp, and GitHub (before Microsoft was sold) used bootstrapping. At the same time, Uber, Airbnb and Tesla were able to achieve global success thanks to venture capital investments.

Both ways have their advantages and risks. Bootstrapping is suitable for startups that can finance themselves and want to maintain control. Venture capital investments are for those who strive for rapid growth and are not afraid to delegate part of the management. It is important to soberly assess the possibilities of your business and choose the strategy that best suits your goals.