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. 

Special Interest Group

Start-up Companies Special Interest Group.

Special Interest Group
Special Interest Group (110 members)


Forum about Start-up Companies. Below you can ask a question about this topic, share your experiences, report a new development, or explain something.

topic 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 out and see for yourself". In other words, business decisions should always be ba...
Comments7 comments
topic Development Stages of Small Businesses and Start-ups
As companies grow, they pass through different growth stages. Churchill and Lewis researched five development stages that companies go through as they grow and mature. Every development stage is chara...
Comments2 comments
topic Validated Learning of Lean Startups: The 3 A's
Entrepreneurs embracing the Lean Startup-philosophy essentially adapt the ideas of Lean Manufacturing (small batch sizes (KANBAN), JIT, shortening cycle times, decreasing waste) to the continuous impr...
🔥 List of Reasons for Start-up Failures
Many entrepreneurial companies end in a disappointing way. For the founders, employees, investors, and even for the community and society as a whole. According to interesting findings of Harvard Prof....
Comments8 comments
topic Creating the Company Culture of Start-ups
How does a start-up lay a foundation for a success culture during early stages? Does culture happen naturally, or can the company consciously build it. Would love to hear your comments....
Comments1 comments
topic Start-Ups Should be Socially Beneficial
Start-ups are generally associated with high growth, technology oriented companies in which investors are interested due to their risk-reward profile, low costs, higher risks and high potential for RO...
Comments1 comments
topic 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 three engines of growth for startups. Four Sources of Sustainable Growth Firs...

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Best Practices

The best, 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 realization of their idea(s), Joshua Gans, Erin L. Scott and Scott Stern developed a ver...
Comments3 comments

🥈 The Main Tensions in High-tech Start-ups
Wakee and De Weerd-Nederhof (2008) researched what types of functions or "capitals" (high-tech) start-ups are facing - and need to manage, balance and overcome - during their rapid growth phase. These...
🥉 Pitfalls in Financial Planning of Start-ups
Poor financial management and planning during the initial stages of start-ups' operations may cause underperformance or even failure. Dunn and Cheatham (1993) identified several factors, which are cha...
topic Why Start-ups Prefer Short-term, Non-External Financing
Bootstrapping, defined as a set of methods to enable companies to meet their financing needs without reaching out for long term external financing, is applied by 90% of start-ups at some point in time...
Expert Tips

Advanced insights about Start-up Companies. Here you will find professional advices by experts.


How to Pitch your Startup Company to Venture Capitalists? Stage Presence

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...
Information Sources

Various sources of information regarding Start-up Companies. Here you will find powerpoints, videos, news, etc. to use in your own lectures and workshops.


Sources and Methods of Financing a Start-up Company or Small Business

Finance, Start-up Financing, Small Business, SME, Bootstrapping, Equity Capital, Debt Capital, Venture Capital
This presentation elaborates on the methods to finance a start-up company. The presentation includes the following secti...

Establishing an Innovative Social Enterprise

Social Entrepreneurship, Entrepreneurial Organization
This presentation elaborates on social entrepreneurship and innovation. It includes the following sections: 1. Workshop...

Entrepreneurial Finance: Sources Of Funding

Financing New Ventures, Start-up Financing, Equity Financing, Debt Financing, Venture Capital, Entrepreneurship
Interesting presentation about the financing of new companies, including the following sections: 1. What makes entrepre...

Business Valuation | Company Valuation | Firm Valuation

Business Analysis, Company Analysis | Firm Analysis
This presentation elaborates on the valuation and analysis of companies and include the following sections: 1. Company ...

Preparing a Feasibility Study

Feasibility Analysis
This presentation gives an introduction into the concept of idea/business feasibility studies. The presentation consists...

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Compare with: Business Incubator  |  Liquidation Value  |  Feasibility Study  |  Blue Ocean Strategy  |  Joint Venture  |  Special Purpose Vehicle

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