Bootstrap financing applied by South African entrepreneur

Abstract

The purpose of this research was to explore the application of creative techniques utilised by entrepreneurs in a South African context in order to gain access to the financial and other resources required to start up new businesses. These techniques are defined as bootstrap financing techniques. Further to this the research then set out to determine whether the application of the identified techniques differed based on certain predefined characteristics of the business and entrepreneur. The study was based on the principals of a descriptive research study. Previously identified characteristics of bootstrap financing were combined in a survey in order to conduct quantitative research on the techniques utilised by South African entrepreneurs. The study further more gathered specific information on the characteristics of the businesses as well as the entrepreneurs for the purpose of further evaluation. The research determined the most important bootstrap financing techniques as perceived by South African entrepreneurs. Furthermore the results indicated that that there were specific bootstrap financing techniques for which the age or size of the business influenced the importance of the application for the technique. Differences in education characteristics of the entrepreneur, was also found to be related to the differences between associated importances of some of the bootstrap financing techniques identified. Finally these results were used to construct an operating model for entrepreneurs depending on the characteristics of their business or of themselves, while also considering the overall importance of the techniques evaluated.