what is the difference between a startup and a business?
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A startup is just a type of business.
Typically, when someone uses the word “startup”, they have a few key things in mind:
1. It’s tech-related. Not necessarily *computer* tech, but some sort of advanced, high-technology, and it has a “disruptive idea” that is – if it can be realized – worth a lot.
2. It is relatively new, relatively small, but is either about to or is in the process of rapidly expanding in size. It is a company that is actively “acquiring talent”, i.e. highly skilled and qualified technical staff to achieve its goal.
3. It is typically funded by venture capital – that is, people or organizations give the startup chunks of money in exchange for equity (ownership stake) in the company.
4. All of this is leading to a specific business path: go public, sell or bust, quickly. Either the company gets big, and gets bought by some larger (usually, Fortune 500) company for a ridiculous sum of money that gets everyone (the owners, venture capitalists, and likely employees with stock options too) rich; it goes public on its own and becomes a behemoth in the space (rarer), or it fizzles out, people lose money, but that’s the risk in the startup ecosystem. And all of this happens on the timespan of a few years, or the VCs get antsy, the employees leave, and the business goes bust.
This is all in contrast to most “traditional” businesses which seek to grow slowly but consistently over time, carving out a niche for themselves to make ownership, perhaps not rich, but at the least comfortable.
So, really, it’s just a fancy buzzword for a company that is trying to grow extremely quickly with a goal of getting bought for tons of money.
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