What’s the difference between a “startup” and just a new company?
In: Economics
Startup is a venture that intends to have exponential growth of revenue (eventually) to reward founders and early investors with 10-50x + returns of invested capital. Returns less than that don’t make much sense for early investors since the risk is not justified compared to other investments, and would likely be considered a small business which aim to produce a healthy return for owner and cover emoloyee salaries. Starups tend to be software companies since the profit margins and scalability are very high in a digital instead of physical product. They usually have to be disruptive, innovative ideas with a large addressable market.
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