Indeed, all (good) things come to an end. In spring 2021, so does my PhD journey, resulting in the thesis Financial Bootstrapping as Relational Contract. Literally, bootstrap is a leather strap on the back of a boot that is used to pull the boot up. The term bootstrapping, in the context of entrepreneurship, comes from an idiom to pull oneself up by own bootstrap. Essentially, this is what entrepreneurs do, at birth and early development of their ventures.

A question of how entrepreneurs acquire and manage their resources, albeit the challenges and uncertainties they face, lies close to my heart. For over ten years, and at the time of starting my doctoral studies, I myself have been an entrepreneur. Financing new firms interested me deeply. I knew I could bring to this sub-field of research my own, practical experience, as well as individual voices of some of the entrepreneurs I met over my start-up journey. I was familiar first-hand with borrowing, begging, and stealing – within the legal boundaries, of course. I also knew, prior to getting introduced to academic perspectives, that at early development stages of firms, resources rarely come from banks and venture capitalists – despite of what the idyllic Silicon Valley cases might depict.

Academic perspective on entrepreneurial financing intrigued me from the start. There seemed to be many diverse and confusing perspectives to untangle. Come up with the best idea, and you will raise money! No, idea does not matter – just be a salesman, be charming, be charismatic, reciprocate, and you will be successful! Use your own money for as long as possible, only so will you retain the control over your business! No, do not use your own money – this will limit your possibilities for growth! Involve your family and friends, they are your biggest advocates and motivators! No, do not involve your personal network – they are biased judges, and you need the brutal honesty!

In this turmoil, I was fortunate to find great mentors and excellent thesis advisors, who helped me navigate this confusing landscape of knowledge, keep my head cool, read a lot and from diverse sources, and not expect to come up with The Question for my project overnight. I did just that, and slowly, but steadily my bootstrapping study was born.

My thesis is about what entrepreneurs actually do when it comes to financing their firms – small, young, risky, and generally unattractive for traditional capital market. It is also about what resource needs actually are, how one as an entrepreneur can separate the needs from wants and reason for own choices as to some of the resources that can be obtained for free, and some others that might be worth paying the market price for. It is also about potential costs and benefits of frugal resource management. In my study, I work to understand, interlink, and conceptually ground the three essential categories of interest – resource needs, conditions for bootstrapping behaviors, and the possible outcomes of thereof.

I argue that these cannot be quantitatively measured, but they ought to be qualitatively understood in their layered complexity and as a process that is far from linear. I conduct my study longitudinally and build my theory ground-up based on first-hand insights from entrepreneurs and their resource-providers. This is a multi-phase, case-within-a-case study, in which I develop the conceptual model for understanding bootstrapping exchanges as a set of relational contracts. Theoretically, my study builds at the intersection of two fields of research – bootstrapping, and relational contracting. To understand the landscape of existing knowledge within these respective fields, I combine the systematic literature reviews with bibliometric analysis. I hope that my thesis may help to extend and nuance the understanding of new firm financing – for policy actors, practicing entrepreneurs, and their resource-providers. As for me, I look forward to work hands-on with startups again, and now – hopefully – enrich my next entrepreneurial journey with newly acquired research insights.