Start-up Company

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Definition Start-up Company? Meaning.

A Start-up Company (SC), also called a "Startup", is a new business venture or company in the earliest stage of its operations. It is a relatively new, usually small business. Sometimes SCs are not even real legal companies yet, because they are still temporary or in formation.

It is typical for a startup to be surrounded by a lot of uncertainty about its vision, strategy, market, customers, proposition, and product/service.

Quite often, the term startup company is used to indicate just a subset of new companies: technology-oriented firms having perspectives for exceptional growth, aiming at disruptive innovation, or at creating a Blue Ocean. Such startups, when they are successful, are typically more profitable than established businesses and non-technology-oriented startups, in the sense that they can potentially grow rapidly with limited investment of capital.

Attractiveness of Startup Companies for Investors. Scalability!

In case they are designed to search, build and implement a repeatable and scalable business model, allowing for fast future growth, SCs are very attractive for suppliers of private equity or venture funding, such as angel investors, venture capitalists. A startup company represents an attractive opportunity for an exceptional return on investment, albeit with high risk levels.

Startup Learning and Experimenting

Typical Internet startups tend to apply a philosphy of continuous improvement and learning to the development of their offering and firm. They make frequent use of management instruments like A/B Testing, a Business Incubator, Validated Learning and rely considerably on certain special metrics (see 3 A's of Metrics).

Startup Business Strategy Frame

Startup success is greatly attributed to pre-startup phase planning. Startups develop business plans to pitch their ideas to secure funding and or partners.

Here you can find a useful strategy template for a startup strategy.

The End of Startup Businesses

Due to disappointing demand, revenues, or errors in the underlying strategic vision, strategy or business plan, many small scale entrepreneurial organizations turn out not sustainable in the long term. In such circumstances, a sound exit strategy is useful.

In a more positive scenario, a startup business will cease to be considered a 'startup' when it passes certain milestones, such as becoming profitable, or becoming publicly traded in an Initial Public Offering. Also it may end its life as an independent entity through a merger with or an acquisition by another firm. 

Forum New Topic Forum about Start-up Companies. 🔥 NEW Genchi Gembatsu - Go Out and Talk to Customers Genchi Gembatsu is one of the core principles of Lean Manufacturing and is a Japanese term used at Toyota, meaning "go o (...) 10   7 comments 5 Development Stages of Small Businesses and Start-ups (Churchill and Lewis) As companies grow, they pass through different growth stages. Churchill and Lewis researched five development stages tha (...) 8   1 comments Creating the Foundation for a Later Success Culture in Start-ups How does a start-up lay a foundation for a success culture during early stages? Does culture happen naturally, or (...) 5   1 comments 4 Sources of Sustainable Growth and 3 Engines of Growth for Startups In the illuminating book of "The Lean Startup," the author Eric Ries put forth four sources of sustainable growth and th (...) 4   The Three A's of Metrics for Validated Learning of Lean Startups Entrepreneurs embracing the Lean Startup-philosophy essentially adapt the ideas of Lean Manufacturing (small batch sizes (...) 3   The 4 Main Tensions in Start-ups Wakee and De Weerd-Nederhof (2008) researched what types of functions or "capitals" (high-tech) start-ups are facing - a (...) 3   Pitfalls in Financial Planning of Start-ups Poor financial management and planning during the initial stages of start-ups' operations may cause underperformance or (...) 3   Why Start-ups Prefer Short-term, Internal Financing Bootstrapping, being defined as a set of methods to enable companies to meet its financing needs without reaching out fo (...) 2   Start-Ups Must Be Socially Beneficial Start-ups are generally associated with high growth, technology oriented companies in which investors are interested due (...) 1   Heavy Competition is Beneficial for Startups Having studied tax data of 2 million companies that were launched in the UK between 1995 and 2005, Andrew Burke and Step (...) 1   2 comments Life Cycle of New Venture. Growth and Transitions Is the life-cycle model appropriate to use when describing the growth and transition of a new venture? (...) 0   Start a new forum topic about Start-up Companies Share your opinion, knowledge and experience or ask a question (sign up for free first)

Best Practices Sign up The top-rated topics about Start-up Companies. Here you will find the most valuable ideas and practical suggestions. Strategy for Start-ups: The Entrepreneurial Strategy Compass In order to help entrepreneurs choose the right strategy by guiding their imagination and commitment toward the realizat (...) 12   3 comments

Expert Tips Sign up Advanced insights about Start-up Companies. Here you will find professional advices by experts. How to Deliver a Business Pitch? Storytelling, Corporate Pitch, Pitching an Idea, Entrepreneurship, Assessing Pitches, Showrunners, Artists, Neophytes How do you deliver a very good pitch for some business idea or venture you want to sell? Kimberly D. Elsbach, who has a (...) Aligning Compensation Plans for the Sales Force of Start-Ups Aligning Sales Force Behavior and Changing Strategy Directions, Sales Compensation Plans In today’s dynamic environment, organizations – especially start-ups – often shift their strategy over time. In this pro (...)

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