Startup
The term startup refers to a company in the first stages of operations. Startups are founded by one or more entrepreneurs who want to develop a product or service for which they believe there is demand. These companies generally start with high costs and limited revenue, which is why they look for capital from a variety of sources such as venture capitalists.
KEY TAKEAWAYS
A startup is a company that's in the initial stages of business.
Until the business gets off the ground, a startup is often financed by its founders and may attempt to attract outside investment.
The many funding sources for startups include family and friends, venture capitalists, crowdfunding and loans.
Startups must also consider where they'll do business and their legal structure.
Understanding Startups
Startups are companies or ventures that are focused around a single product or service that the founders want to bring to market. These companies typically don't have a fully developed business model and, more crucially, lack adequate capital to move onto the next phase of business. Most of these companies are initially funded by their founders.
Many startups turn to others for more funding: family, friends and venture capitalists. Silicon Valley is known for its strong venture capitalist community and is a popular destination for startups, but is also widely considered the most demanding arena. Startups can use seed capital to invest in research and to develop their business plans. Market research helps determine the demand for a product or service, while a comprehensive business plan outlines the company's mission statement, visions and goals, as well as management and marketing strategies.
Special Considerations
Location
Legal Structure
Funding
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