Meaning of Startup Part 1
Many people still dream of starting their own business and being their own boss. To found your own company, to build it up step by step, and to realize yourself with it. Many people then speak of a startup when setting up a company . But does this really apply to every start-up or does startup mean something special?
What is a startup?
According to Polyhobbies, the term startup is derived from the English “to start up” , i.e. to found something, to set something in motion. The startup is about a young company that is not yet properly established on the market. But it would be wrong to call any company a startup that has not been established in the market. You can also have opened a delicatessen store, be brand new in town, are not yet integrated into the local market and are therefore still not a startup. Therefore, the most important characteristic for a startup is to be a company with an innovative business idea. In most cases, the startup starts with very little equity. In order to be able to develop, to gain a foothold in the market and to draw the attention of potential customers in the first place, startups often take special paths in the area of financing .
The startup phase
If you take it very seriously, then you can also describe a startup as an early phase of setting up a company . It is not enough for you to just have an innovative idea. You also have to develop a business model , which you have to plan and work out in detail. But you have to design this in such a way that it can be used for several possible scenarios. The central point of a startup is the business plan in the startup phase . The more detailed this is, the higher the chances you are of finding the right investors and financiers.
What is the startup phase?
A startup goes through several so-called startup phases, which you can also consider as development phases . These phases can differ depending on the startup and also differ in their duration. Nevertheless, these startup phases follow a certain pattern.
- The orientation phase: This phase is also known as the pre-seed phase. The focus here is on finding the right startup business idea and the feasibility of this idea.
- The planning phase: Here you are talking about the seed phase. This startup phase includes all the preparatory work that you have to do for the foundation. It is important to create the business plan, to create a first prototype, to carry out market analyzes and to create the proof of concepts.
- The founding phase: Now the founding phase is called a startup. That means, you are now founding your startup. You are now preparing everything for the market launch. The structure of the organization begins and you work on your business plan in detail.
- The build-up phase: Here is the speech of 1 st Stage and this startup phase goes from first to third year. It usually takes an average of a year before you can either start production or you can complete your service.
- The growth phase : This startup phase usually extends from year 4 to year 6. During this time, you start your expansion strategy and lead the startup into profitability. In many cases, issues such as restructuring and leadership and recruiting are becoming more and more important.
- The maturation phase begins in the 6th year . This startup phase is also called 3 rd or referred later stage. You’re moving away from aggressive growth and switching to sustainable growth. In this startup phase, your startup begins to orient itself towards future markets. Now is the time to work on the corporate culture.
What financing options are there for a startup?
As already mentioned at the beginning, a startup usually begins with little equity. Instead, the search for other financing options is sought early on . A very common variant for startup financing is venture capital or the search for a business angel. Here we present some of the best-known and most promising financing options.
| Type of financing | Description |
| Venture capital | There are a number of so-called investment companies on the market . They specialize in supporting your startup with risk capital in the early stages. But they don’t do this because they are just nice people. Rather, their goal is to sell the shares they have acquired in your startup with their capital at a later success. In short, they want to earn a lot from the exit from the startup. The advantage, however, is that you don’t only get capital from them. They also provide you with a lot of business know-how. Behind this, however, there is again the disadvantage that you are deprived of some of your say.You can find out everything about the topic in our venture capital article . |
| Business angels | The business angels are very often successful company founders . You made a lot of money either by going public or selling the company. They provide you with extensive know-how and very good networks. In addition to the capital you need, of course. In most cases, business angels are already active in the early startup phase, so they are already involved in your entire start-up process. To get a business angel, you need a perfect business plan . |
| Crowdfunding | A relatively new way of raising capital is crowdfunding . This is a large number of possible donors. It is not a single company that invests in your startup, but a mass of people, the so-called crowd . Before you start your campaign, you set a minimum amount of capital that you need. As a thank you, each donor receives a small consideration from you, which is determined in advance. |
| Funding programs | Very interesting on the subject of funding programs are those offered by KfW . They are aimed at different financing situations . These subsidies are paid out through your house bank. But you shouldn’t ask your house bank about the possibilities. As a rule, they have little interest in teaching you such programs. You should therefore ask KfW specifically about financing options. * Further funding programs are listed in the following section. |
| Family and friends | It is also very popular to look around for capital within the family or among friends . If you know someone who can be described as wealthy, you should present your idea to them. But here too, you have to make sure that everything is precisely regulated in writing, as is the case with external financiers. |
| Self-financing | It may seem a bit surprising at first, but around 90 percent of startups today are self-financed . This is either because you have already saved a lot yourself, but also because of the low interest rates. Loans are better and cheaper to get. This variant may take a little more time for your startup, but it has the great advantage that you can retain full control of your company from the start . |
