Bootstrap Financing Practices in Small Enterprises to Support Rural Green Tourism

Bambang Agus Pramuka, Zahrotush Sholikhah, Mohammad Fathon Pramuka, Khalid Eltayeb Elfaki


Rural tourism is surrounded by various forms of small business that face serious financial challenge during the covid-19 pandemic. In this study, we use phenotypic traits as a lens to investigate how bootstrapping affects the success of small businesses during the covid-19 pandemic. To better understand entrepreneurial behavior, this study investigates small business bootstrapping in the green tourism domain. Based on a survey of 123 small company owners and interviews with 8 entrepreneurs in the zone, this study creates a taxonomy of bootstrapping strategies and investigates their constituent elements and logics. Additional qualitative research was conducted to confirm the taxonomy of entrepreneurial bootstrap behavior. The report presents a comprehensive picture of bootstrap funding in small businesses. With this research, we gain a better knowledge of how small enterprises approach resource mobilization and why entrepreneurs use specific bootstrapping tactics.

Keywords: Bootstrap, Financing, Small Business, Rural Area, Green Tourism

Full Text:



Adomdza, G. K., Åstebro, T., & Yong, K. (2016). Decision biases and entrepreneurial finance. Small Business Economics, 47(4), 819–834.

Barney, J. B. 1991. “Firm Resources and Sustained Competitive Advantage.” Journal of Management 17: 99 – 120.

Bates, T. 1997. “Financing Small Business Creation: The Case of Chinese and Korean Immigrant Entrepreneurs.” Journal of Business Venturing 12: 109 – 124.

Block, J. H., Colombo, M. G., Cumming, D. J., & Vismara, S. (2018). New players in entrepreneurial finance and why they are there. Small Business Economics, 50(2), 239–250.

Brush, C. G., N. M. Carter, E. J. Gatewood, P. G. Greene, and M. M. Hart. 2006. “The Use of Bootstrapping by Women Entrepreneurs in Positioning for Growth.” Venture Capital: An International Journal of Entrepreneurial Finance 8 (1): 15 – 31.

Cassar, G. 2004. “The Financing of Business Start-ups.” Journal of Business Venturing 19: 261 – 283. Choen, W. M., and D. A. Levinthal. 1990. “Absorptive Capacity: A New Perspective on Learning and

Innovation.” Administrative Science Quarterly 35: 128 – 152.

Cooper, A. C., F. J. Gimeno-Gascon, and C. Woo. 1994. “Initial Human and Financial Capital as Predictors

of New Venture Performance.” Journal of Business Venturing 9: 371 – 395.

Dreyer, B., and K. Gronhaug. 2004. “Uncertainty, Flexibility and Sustained Competitive Advantage.”

Journal of Business Research 57 (5): 484 – 494.

Ebben, J. 2009. “Bootstrapping and the Financial Condition of Small Firms.” International Journal of

Entrepreneurial Behaviour & Research 15 (4): 346 – 363.

Ebben, J., and A. Johnson. 2006. “Bootstrapping in Small Firms: An Empirical Analysis of Change Over

Time.” Journal of Business Venturing 21: 851 – 865.

Fraser, S., Bhaumik, S. K., & Wright, M. (2015). What do we know about entrepreneurial finance and its relationship with growth? International Small Business Journal: Researching Entrepreneurship, 33(1), 70–88.

Freear, J., J. E. Sohl, and W. E. Wetzel Jr.. 1995. Early Stage Software Ventures: What is Working and What is Not. Durham, NH: Centre for Venture Economics, University of New Hampshire. Gabriel, Y. 2000. Storytelling in Organizations: Facts, Fictions and Fantasies. Oxford: Oxford University Press.

Godoy, H., & Nelson, R. E. (n.d.). Creating Something from Nothing: Resource Construction through Entrepreneurial Related papers Creat ing Somet hing from Not hing: Resource Const ruct ion t hrough Ent repreneurial Bricolage.

Harrison, R., Li, Y., Vigne, S. A., & Wu, Y. (2022). Why do small businesses have difficulty in accessing bank financing? International Review of Financial Analysis, 84, 102352.

Harrison, R. T., and C. M. Mason. 1997. “Entrepreneurial Growth Strategies and Venture Performance in the Software Industry.” Paper presented at the 17th Annual Babson College Entrepreneurship Research Conference, Boston, MA.

Harrison, R. T., C. M. Mason, and P. Girling. 2004. “Financial Bootstrapping and Venture Development in the Software Industry.” Entrepreneurship and Regional Development 16: 307– 333.

Johannes Gerschewski. (2013). The three pillars of stability: legitimation, repression, and co-optation in autocratic regimes. Democratization, 20, 13–38.

Jones, O., & Jayawarna, D. (2010). Resourcing new businesses: social networks, bootstrapping and firm performance. Venture Capital, 12(2), 127–152.

Lichtenthaler, U. 2008. “Relative Capacity: Retaining Knowledge Outside a Firm’s Boundaries.” Journal of Engineering and Technology Management 25: 200 – 212.

Maher, S. M., Fenichel, E. P., Schmitz, O. J., & Adamowicz, W. L. (2020). The economics of conservation debt: a natural capital approach to revealed valuation of ecological dynamics. Ecological Applications, 30(6).

Manigart, S., and C. Struyf. 1997. “Financing High Technology Start Ups in Belgium: An Explorative Study.” Small Business Economics 9: 125 – 135.

Malmström, M. (2014). Typologies of bootstrap financing behavior in small ventures. In Venture Capital (Vol. 16, Issue 1, pp. 27–50). Taylor & Francis.

Moghaddam, K., Aidov, A., DuVal, C., & Azarpanah, S. (2017). High-growth entrepreneurial firm funding: a qualitative study of native-born and immigrant entrepreneurs. Venture Capital, 19(1–2), 75–94.

Neeley, L., and H. van Auken. 2010. “Differences between Female and Male Entrepreneurs’ Use of Bootstrap Financing.” Journal of Developmental Entrepreneurship 15 (1): 19 – 34.

Nguyen, B. (2021). Local institutions, external finance and investment decisions of small businesses in Vietnam. Economic Systems, 45(3), 100880.

Pramuka, B. A., & Pinasti, M. (2020). Does cloud-based accounting information system harmonize the small business needs? Journal of Information and Organizational Sciences, 44(1), 141–156.

Purwidianti, W., Pramuka, B. A., & Laksana, R. D. (2021). The Moderation Role of Religiosity on the Relationship Between Risk Tolerance and Financial Behavior of Small Businesses’ Owners. Quality - Access to Success, 22(185), 88–94.

Rokhayati, I., Pramuka, B. A., & Sudarto. (2019). Optimal financial leverage determinants for smes capital structure decision making: Empirical evidence from Indonesia. International Journal of Scientific and Technology Research, 8(11), 1155–1161.

Sapienza, H. J., M. A. Korsgaard, and D. Forbes. 2003. “The Self-determination Motive and Entrepreneurs Choice of Financing.” In Advances in Entrepreneurship, Firm Emergence and Growth, edited by J. Katz and D. Shepherd, 105 – 138. Greenwich, CT: JAI Press.

Smith, D. 2009. “Financial Bootstrapping and Social Capital: How Technology-Based Start-ups Fund Innovation.” International Journal of Entrepreneurship and Innovation Management 10 (2): 199 – 209.

Tidd, J., J. Bessant, and K. Pavitt. 2001. Managing Innovation Integrating Technological, Market, and Organizational Change, 388 pp. West Sussex: Wiley.

Timmons, J. A. 1999. New Venture Creation: Entrepreneurship for the 21st. Century. 5th ed. Erwin, NY: McGraw-Hill.

Timmons, J., and S. Spinelli. 2004. New Venture Creation. 6th ed. Chicago, IL: Irwin.

Vanacker, T., S. Manigart, M. Meuleman, and L. Sels. 2011. “A Longitudinal Study on the Relationship between Financial Bootstrapping and New Venture Growth.” Entrepreneurship & Regional Development 23: 681 – 705.

Van Auken, H., and L. Neeley. 1996. “Evidence of Bootstrap Financing Among Small Start-Up Firms.” Entrepreneurial and Small Business Finance 5 (3): 235 – 249.

Volberda, H. W. 1996. “Toward the Flexible Form: How to Remain Vital in Hypercompetitive Environments.” Organization Science 7 (4): 359 – 374.

Winborg, J., and H. Landstro ̈m. 1997. “Financial Bootstrapping in Small Businesses – A Resource-Based View on Small Business Finance.” In Frontiers of Entrepreneurship Research, edited by P. D. Reynolds, W. D. Bygrave, N. M. Carter, P. Davidsson, W. B. Gartner, C. M. Mason, and P. P. McDougall, 471 – 485. Wellesley, MA: Center for Entrepreneurial Studies, Babson College.

Winborg, J., and H. Landstro ̈m. 2000. “Financial Bootstrapping in Small Businesses: Examining Small Business Managers’ Resource Acquisition Behaviors.” Journal of Business Venturing 16: 235 – 254.

Valos, M., & Baker, M. (1996). Developing an Australian model of export marketing performance determinants. Marketing Intelligence & Planning, 14(3), 11–20.

Zahra, S. A. 1996. “Technology Strategy and New Venture Performance: A Study of Corporate- Sponsored and Independent Biotechnology Ventures.” Journal of Business Venturing 11: 289 – 321.


  • There are currently no refbacks.