selffunding

Self-funding, also known as self-financing or bootstrapping, is the practice of funding a project, business, or venture using one’s own resources or the revenue generated by the venture, rather than relying on external capital such as investors, venture funding, or bank loans.

In business, self-funding typically means using personal savings, earned income, or profits reinvested back into the company. This approach can help a founder retain full ownership and maintain control over strategic decisions, pursue privacy, and avoid equity dilution or debt obligations to external parties. However, it also places the financial risk on the individual and can limit the speed and scale of growth, especially for capital-intensive endeavors.

Common sources of self-funding include personal savings, ongoing revenue, cost-conscious operations, lines of credit secured by personal assets, and loans from family or friends. Effective self-funding often requires disciplined cash flow management, a lean business model, clear milestones, and a plan to reach profitability before seeking external financing.

Self-funding is not limited to businesses; it can apply to personal medical expenses, legal costs, film productions, or property purchases where the individual relies on internal funds rather than third-party financing. It carries advantages in control and risk exposure but may constrain growth and increase personal financial exposure. The suitability of self-funding depends on project risk, cash flow predictability, and the founder’s risk tolerance.