Bootstrap, borrow, or raise? Helping founders make the right funding choice

You’ve started your business and you know there's a market for your idea. But you need initial funding to get past the MVP stage. Or maybe you're in the market but you know you can scale beyond your initial client base if you only had more funding to devote to sales and marketing.

Do you dig into your savings? Apply for a loan? Or go out and pitch to investors?

Breakthrough Labs has been running a series of webinars, supported by the British Business Bank, to help early-stage female founders make these types of complicated funding decisions. In our first webinar, “Bootstrap, Borrow or Raise,” we spoke with finance experts and start-up advisor to break down these paths, helping founders decide what’s right for you. If you missed it, here's a summary of what we learned, distilled into a handy four-step process.

1. First, Know Your Business Model

Every funding decision starts with one question: What kind of business are you building?

• If your growth is steady and customer-funded, you may not need external capital right away.

• If your idea requires upfront investment (e.g. tech product development), raising or borrowing might make more sense.

Our experts advised founders to spend a lot of time on making sure their business plan is strong, since it will be needed regardless of what kind of funding founders seek. In short, it’s about aligning your plans for funding with your goals — and your business stage.

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2. Bootstrapping Isn’t Just About Saving Money

Even investors who say they invest pre-seed are asking early-stage start-ups to show revenue, which means founders should think about generating revenue from sales from day one. If you decide to fund your business growth through bootstrapping, it can give you:

• Full control of your vision

• Clean ownership (no dilution)

• More leverage later if you do raise

But keep in mind that it could mean slower growth and more personal risk. However, if you have the runway and discipline to build lean, bootstrapping can be incredibly powerful.

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3. Borrowing: Understand Your Risk

Loans and non-dilutive finance options are becoming more accessible — and many are designed with early-stage founders in mind (like the Start Up Loan Scheme). But with any debt, make sure:

• Your business can afford repayments

• You understand the full cost, not just the interest rate

• You can pivot the business, if needed, to service the loan

  
  

  Borrowing can work brilliantly — if it gets you to a point of return and isn’t a band-aid. But as with any other funding, you need to have a good understanding of what the funder is looking for and whether that matches your business model.

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4. Raising: Are You Really Ready for Equity?

Fundraising sounds glamorous — but it’s time-consuming, strategic, and high-pressure.

Before you raise, ask:

• Is my business scalable and high-growth?

• Can I show traction, metrics, and a clear value proposition?

• Am I prepared for due diligence and giving up equity?

  
  

Not every business is venture-backable — and that’s OK. Founders shouldn't think that because they have a start-up, they need to seek investment from an angel investor or VC. You and your business might not be ready or able to scale at the pace that equity investors need.

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✨ Final Thought: You Have Options — Use Them Intentionally

There’s no “one right way” to fund your business. The key is knowing your strategy, your timeline, and what you’re willing to trade off. Whether you bootstrap, borrow, or raise — make it a conscious decision.

👉 Stay tuned for Part 2: “Before you raise: 7 questions every female founder should ask."