STARTUP COMPANY

A 'startup company' is a business with a limited operating history. While slow-growth businesses may be startups, investors are most attracted to those new companies distinguished by their risk/reward profile and scalability. That is, they have lower bootstrapping costs, higher risk, and higher potential return on investment. Successful startups are typically more scalable than an established business, in the sense that they can potentially grow rapidly with limited investment of capital, labor or land.
In order to achieve the high scalability necessary to create the high return on investment, startups are generally not service-oriented companies. Instead they focus on creating a product, since product oriented companies can scale more rapidly.
Startups enjoy several unique options for funding. Venture capital firms and angel investors may help startup companies begin operations, exchanging cash for an equity stake. In practice though, many startups are initially funded by the founders themselves.
A company may cease to be a startup as it passes various milestones, such as becoming profitable, or becoming publicly traded in an IPO, or ceasing to exist as an independent entity via a merger or acquisition.
Startup companies, particularly those associated with new technology, sometimes produce huge returns to their creators and investors - a recent example of such was Google, whose creators are now billionaires through their share ownership. However, the failure rate of startup companies is very high.
While there are startup businesses created in all types of businesses, and all over the world, some locations and business sectors are particularly associated with startup companies. The Internet bubble of the late 1990s was associated with huge numbers of internet startup companies, some selling the technology to provide internet access, others using the internet to provide services. Some, but by no means all, of this startup activity was located in Silicon Valley, an area of northern California renowned for the high level of startup company activity.
The first critical and pivotal task in setting up a business is to conduct research in order to validate, assess and develop the ideas or business concepts in addition to opportunities to establish further and deeper understanding on the ideas or business concepts as well as their commercial potentials.

Contents

See also

Further reading

Technical guides

Startup biography

See also

★ Entrepreneurship

★ Business plan

★ Venture capital

★ IPO

★ Exit strategy

★ Silicon Valley

★ Stock market bubble

★ Liquidity event

★ Business incubator

★ Not Just For Profit

★ Startupers

Further reading

Technical guides

★ New Venture Creation, Jeffry A. Timmons, ISBN 0-07-287570-4

★ "High Tech Start Up, Revised and Updated: The Complete Handbook For Creating Successful New High Tech Companies", John L. Nesheim,
(Available also in Chinese, Japanese, and Korean) ISBN 0-684-87170-X

★ How to Start a Startup, by Paul Graham

★ Why Not Not Start a Startup, by Paul Graham

Startup biography

★ "High Stakes, No Prisoners: A Winner's Tale of Greed and Glory in the Internet Wars" Charles Ferguson, ISBN 0-8129-3143-2

★ "Startup: A Silicon Valley Adventure", Jerry Kaplan ISBN 0-395-71133-9

★ "Burn Rate:How I Survived the Gold Rush", Michael Wolf, ISBN 0-684-84881-3

★ "Go BIG or Go HOME: How the next generation of startup companies think BIG, grow FAST, and dominate markets overnight", Wil Schroter, ISBN 1-599-71274-1