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When starting a project or business, there are two extreme approaches. One is where you do everything yourself without external help: learn the techniques yourself, develop your own tools, providing your own capital. The other extreme would be to find as much external help as you can: consulting/hiring domain experts, using COTS solutions, looking for investors/partners.

Compared to the former, the latter tends to have less risk (for the founders), more capital cost, less retention of knowledge, less equity/control. The former, in certain forms, is sometimes called "bootstrapping". What would the latter be called?

Update: I think I've mislead folks due to poorly presenting this question as a straight-forward antonym request for bootstrap. Bootstrap has a specific meaning in finance, pertaining to the acquisition of capital without taking on external liabilities or equity. I'd like to know what's the opposite of a more general approach to growing a project or business, one which is better covered in this article: "Ben & Jerry's vs Amazon".

Here are some examples which better illustrate the dichotomy:

  • Hiring consultants instead of employees
  • Leasing a pre-furnished office space instead of building a new one
  • Contracting out your IT management to a firm instead of growing in-house staff

I think mainly it's a money vs. time payoff but there are other side effects such as expertise, culture and so on.

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Piggyback is one. –  John Lawler Apr 9 at 3:08
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In the examples you give, you are trying to "de-risk" or "hedge your bets". –  moonstar2001 Apr 9 at 10:10

6 Answers 6

Venture capital is the source of money from other people investing in your business, so "venture funded" would be the opposite of bootstrapped.

In business books it's often the Ben&Jerrys vs Amazon

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Consider "outsourcing" and "corner cutting."

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Outsourcing might be too narrow; I like corner cutting but it's a loaded term. –  congusbongus Apr 10 at 1:44
    
@congusbongus How about the term "facility management?" –  Elian Apr 10 at 2:03

Perhaps Angel Investor is the term you are looking for?

An angel investor is someone who provides the seed money for a startup in exchange for a very large portion of the potential profits.

Per wikipedia:

Because a large percentage of angel investments are lost completely when early stage companies fail, professional angel investors seek investments that have the potential to return at least 10 or more times their original investment within 5 years, through a defined exit strategy, such as plans for an initial public offering or an acquisition.

I think this sounds like the situation you are describing. The risk is really taken by the investor not the founder of the company, but it is at the cost of their potential profits down the line.

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This only covers one aspect of the "not-bootstrap" approach though. One could use loans instead of investment for startup capital. Another aspect of "not-bootstrapping" is using COTS instead of developing in-house products, which is orthogonal to financing. –  congusbongus Apr 9 at 2:08
    
@congusbongus Are you asking about a turn-key investment? Something where a start-up purchases a pre-made business plan, research, etc.? –  David M Apr 9 at 3:27

It doesn't quite fit your examples, but a common term used is simply funded. If you are fully funded (by whatever means) there is no need to pull yourself up by your bootstraps.

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Would "Turn-key" be the word or phrase you're looking for? It describes a business where you invest your funds to purchase a business that is "ready to go." In other words, you have paid someone to set it up for you, and all you do is step in at that point and run the business.

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The term I would use is "parachute." My mother told me that an equivalent Chinese term translates to "fall down from heaven."

That is when things are created by a deep-pocketed entity from the "top down" instead of "bottom up."

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