bootstrap

noun
boot·​strap | \ ˈbüt-ˌstrap How to pronounce bootstrap (audio) \

Definition of bootstrap

 (Entry 1 of 3)

1 : a looped strap sewed at the side or the rear top of a boot to help in pulling it on
2 bootstraps plural : unaided efforts often used in the phrase by one's own bootstraps

bootstrap

adjective

Definition of bootstrap (Entry 2 of 3)

1 : designed to function independently of outside direction : capable of using one internal function or process to control another a bootstrap operation to load a computer
2 : carried out with minimum resources or advantages bootstrap efforts

bootstrap

verb
bootstrapped; bootstrapping

Definition of bootstrap (Entry 3 of 3)

transitive verb

: to promote or develop by initiative and effort with little or no assistance bootstrapped herself to the top … turns out to be pretty talented at identifying and bootstrapping promising creative endeavors.— Harry McCracken

Other Words from bootstrap

Verb

bootstrapper noun

First Known Use of bootstrap

Noun

1875, in the meaning defined at sense 1

Adjective

1926, in the meaning defined at sense 1

Verb

1951, in the meaning defined above

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The first known use of bootstrap was in 1875

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More Definitions for bootstrap

bootstrap

verb

Financial Definition of bootstrap

What It Is

Bootstrapping refers to the efforts of an entrepreneur to start a business using his own assets as the source of capital.

Bootstrapping can also refer to a highly-leveraged transaction when an investor acquires a controlling interest in a company, financing the transaction by using the assets of the company as collateral for the loan.

How It Works

Entrepreneurs typically apply for a business loan from a commercial bank or seek funding from independent investors. An entrepreneur who risks their own money as an initial source of venture capital is bootstrapping.

For example, someone who starts a business using $100,000 of their own money is bootstrapping.

In a highly-leveraged transaction, an investor obtains a loan to buy an interest in the company. The investor uses the assets of the company they are about to purchase as collateral for the loan.

Why It Matters

Bootstrapping frees the entrepreneur from having to pay interest on a loan or from having to share any potential profits with other investors. However, entrepreneurship involves significant risk. When personal funds are used to finance a new business, the person stands to lose not only the time invested but their own money as well.

Bootstrapping in leveraged transactions is extremely risky since the potential investor is using the company’s assets to service their loan.

Source: Investing Answers

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