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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
organizations turn out not sustainable in the long term. In such
circumstances, a sound exit strategy
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.
This ends our Start-up Company summary and forum.
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