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What is startup and what is not a start-up

Not any new IT business is a startup. Moreover 99% of people need no startups, self-employment or a classic business is cool enough.

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What is startup and what is not a start-up

  1. 1. Start-up or not Start-up?What is the difference between self-employment, business, and startup?
  2. 2. Whats the difference?Self-employer is a person who works for himself, alone or as a member ofsome team. The business model is simple and eats all the persons time.Examples: workshop, barber salon, kiosk, web-design studio :)Business is an organization that trades goods or services to consumers tomake money. Lots of people do lots of work, so a businessman has free timeto control more than one business at the same time.Startup is a company or temporary organization designed to look for arepeatable and scalable business model ©. The main "product" of startup isthe company itself, so the company has to be "sold" at the end of the start-upphase. Exit strategy examples: acquisition by bigger company, merging withother business, become a public company (IPO).
  3. 3. Business vs. StartupClassic business has to be always profitable. If you haveno profit during few months you are driving to bankruptcy. Money TimeStartup earns not enough money at the beginning, butthen it growth up exponentially. Money Time
  4. 4. Credit or Investment?Credit - you get money, save all equity, manage yourcompany as you wish. But you have to bail something andreturn money back, in time.Investment - you lose equity, investor tells you how tospend money and to manage your business! But you shareall risks and dont have to return the real money :)Note: If you want to play investments game your companyhas to be "sold" at the end!
  5. 5. Investors. Who are they?3F investors - friends, family, and fools. They give moneyfor the idea or into the team (seed investments).Angel investors give money to find and develop scalablebusiness model ($50-300K for 10-30%).Venture capital funds give money to scale successful andprofitable business ($1m+ for 20-40%).Note: There are lots of people with money, but not all ofthem can be investors, dont play the game without rules!
  6. 6. Startups life cycle● Investigating the problem.● Forming a team and building a prototype.● Seed investments (optional).● Minimum viable product (MVP).● First customers and cash-flow, proof of business concept.● Additional angel investments (optional).● Break-even point and growing revenue.● Round A (B-C) venture investments to scale the business.● Acquisition or IPO.
  7. 7. Startups life cycle in graph
  8. 8. What to choose?If you want to work less, be free from anything, just getmoney for living and fun - choose self-employment.If you want to be rich and powerful, own companies to beinherited by your children - become a businessman.If you want to change the world and build somethingbig, spending 20 hours every day, startup is what youneed!There is alternative way to change the world, be rich, andwork less at the same time. If you have enough money andbusiness contacts you can be an investor :)

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  • AndrewSheludenkov

    Nov. 21, 2012
  • thricegrate

    Nov. 21, 2012

    Dec. 30, 2013
  • rezetanesidali

    Dec. 30, 2013
  • Magraba

    Dec. 30, 2013
  • igorbuhovec

    Apr. 3, 2015
  • volodymyrspodaryk

    Feb. 9, 2016

Not any new IT business is a startup. Moreover 99% of people need no startups, self-employment or a classic business is cool enough.


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