Here are the various ways you might finance a new company:
Generally “bootstrapping” occurs when a company is funded solely by the founders without assistance from external sources of capital. Doing so provides founders with the greatest amount of flexibility in terms of running the business but also requires the founders to take on additional financial risk. At the same time, there can be a downside to bootstrapping if it leaves the company without excess cash to spend before a fundraising event (e.g., making it difficult to offer cash compensation to a key hire). There are pros and cons of bootstrapping and each company is unique, so careful consideration should be given when deciding whether or not this is the correct path for your company.