Two engineering students ____ their company in 1998 with a small bank loan.

Explicación

Starting a business of your own is the regular verb found — founded — founded, so a completed act in 1998 takes founded. A company of their own, paid for with a loan, is something the students brought into existence, whereas the look-alike form found is the past of find — found — found and reports coming across a thing that already existed. The base find carries no past meaning at all.