Meaning & use

bootstrap acquisition

noun·Advancedbusinessfinance

Last updated

UK/ˈbuːtstræp ˌækwɪˈzɪʃn/
US/ˈbuːtstræp ˌækwɪˈzɪʃn/

Meanings

  1. nouncountablebusinessfinance

    A business deal in which a company buys another mainly using its own cash flow or borrowed money rather than outside investors' funds.

    Grammar: Countable: 'a bootstrap acquisition' or 'several bootstrap acquisitions'.

    Patterns

    • make a bootstrap acquisition
    • finance a bootstrap acquisition
    • a bootstrap acquisition of a company

    The founders made a bootstrap acquisition of a small rival using profits from the previous year.

    Analysts praised the bootstrap acquisition because it avoided issuing new shares.

    Their strategy of bootstrap acquisitions let them grow without venture capital.

  2. nouncountablebusinessfinance

    A purchase of a company made by its own management, funded largely from the firm's earnings or assets.

    Grammar: Often used in discussions of management buyouts.

    Patterns

    • a management-led bootstrap acquisition
    • fund something through a bootstrap acquisition

    The managers completed a bootstrap acquisition, paying for the company out of its own reserves.

    A bootstrap acquisition can leave the new owners with heavy debt.

Word forms

pluralbootstrap acquisitions

Common combinations

finance a bootstrap acquisition
The bank agreed to finance a bootstrap acquisition for the family firm.
a bootstrap acquisition strategy
Their bootstrap acquisition strategy kept outside investors away.
complete a bootstrap acquisition
The team completed a bootstrap acquisition in under six months.
bootstrap financing
Bootstrap financing means growing with your own money.

Synonyms and how they differ

leveraged buyout
A leveraged buyout usually involves heavy borrowing against the target company, while a bootstrap acquisition relies more on internal cash flow.
self-funded acquisition
This is a plainer description of the same idea and is clearer for general readers.

Opposites

venture-backed acquisition

Word family

bootstrap verb
To start or grow a business using little outside money.
bootstrap adjective
Describing something done with minimal external funding, as in 'bootstrap startup'.
acquisition noun
The act of buying another company or asset.

Commonly confused: bootstrap acquisition or hostile takeover?

bootstrap acquisition vs hostile takeover

A hostile takeover happens against the target's wishes; a bootstrap acquisition is about how the deal is funded, not whether it is friendly.

Practice

What is the key feature of a bootstrap acquisition?

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