If an entrepreneur starts a business using only personal savings, what is it called?
Answer and explanation
Correct answer: स्व-वित्तपोषण
Using personal savings to start and operate a venture is self-financing and is commonly called bootstrapping. It can reduce interest obligations and outside control, but the entrepreneur also bears the financial risk and may have limited funds for growth. Debt uses borrowed money, while external investment comes from outside owners or investors.
Frequently asked questions
What is the correct answer to this question?
स्व-वित्तपोषण
Why is this the correct answer?
Using personal savings to start and operate a venture is self-financing and is commonly called bootstrapping. It can reduce interest obligations and outside control, but the entrepreneur also bears the financial risk and may have limited funds for growth. Debt uses borrowed money, while external investment comes from outside owners or investors.
Which subject and chapter does this question cover?
This is a Class 11 Business Studies question. Chapter: Sources of Business Finance. Topic: Owner’s Funds.
