In practice it means customers fund the company. You start small, often alongside other work, keep costs beneath what the business earns, and reinvest the difference. The constraint is real — you cannot spend money you have not earned — and it shapes everything: pricing has to work early, the first product must be narrow enough to finish, and unprofitable customers are visible immediately rather than absorbed by a war chest.
The trade-off is control against speed. Bootstrapped founders keep their equity, answer to nobody, and can decide that a $300,000-a-year business paying them well is the goal. They also grow slower, carry personal financial risk, and can be outspent in a genuinely competitive land grab. Neither path is more serious than the other; they suit different markets. Markets that reward being first at scale punish bootstrapping. Markets where customers change tools rarely and buy on trust reward it heavily.
A concrete example: you build a niche invoicing tool while consulting three days a week. The tool earns $900 in month four, $3,200 in month nine, and $7,500 by month eighteen — at which point you drop the consulting. You own 100% of a business earning $90,000 a year, decided every feature yourself, and never wrote a pitch deck. A funded competitor may have reached that revenue in six months, with 30% of their company sold and a board expecting a much larger outcome.