A Startup (or Start-up) is a new business that has or plans to introduce a new product or service into the marketplace. Although a Startup is a business or company, not all businesses or companies can be considered a startup. For a business to be called a Startup, it must fulfil two conditions and these are;

1. Growth: It must have a new product or service (a product or service which is not yet available) 
2. Innovation: A startup has the potential to grow exponentially rather than linearly. It’s scalable. To do this, it must have a market where it will sell its product or service 

It quickly becomes clear that the challenges of a Startup are quite unique from that of most businesses. But that’s not all, here are more unique characteristics of Startups that you should know.

1. The term Startup is only used for businesses in specific industries

Startup is not attributed to just any business or industry. There are specific industries where a new business can be recognized as a startup. These include technology, Software as a service (SaaS), eCommerce and Consumer goods, Financial technology and healthcare. Also, a Startup may function in just one of these industries or several of them at the same time. For example, a tech startup could develop a new product or service that targets the healthcare or financial market. 

2. A Startup aims to address specific problems within the target market

A Startup could venture into any industry mentioned above and by doing so, such industry becomes its target market. But unlike most other businesses, a Startup proposes a new idea, one that occupies a unique position in the target market and solves a particular problem. Because of its unique position, Startups can be profitable even in a highly competitive market. 

3. Investors are the LifeBlood of every Startup

By their nature, Startups are often not profitable during the first few years of their existence. It could take anywhere between 5 to 10 years for a Startup to become profitable. As such, they are heavily dependent on investor funding until they become profitable. Failure to find investors who are willing to fund the business means a certain death. However, not all Startups take so long to become profitable, a few may take less than 5 years but these are the exceptions.

4. Startups need to grow up fast

Just like they need to become profitable as quickly as possible, Startups need to grow up fast as well. This is often referred to as “Scale-up”. A Scale-up is a Startup that has met certain minimum requirements, one of which is that it must be viable. Viability means that the Startup is now generating enough revenue to pay for the cost of its operation. For this to happen, a Startup must have an established business model and already commercialised its product or service. According to the OECD, a Startup should;

1. Have an average annual growth in employment or revenue of more than 20% in the last 3 years
2. Have at least 10 employees 

When all the right boxes are checked, a Startup can then be considered a “high-growth firm” aka a Scaleup.

5. Prospect of a Startup

As a founder or a future founder of a Startup, you may find yourself thinking about the future prospects of your Startup. This is perfectly normal being that there are a lot of “what ifs” involved. However, you should know that there aren't so many options available for a Startup. A Startup typically has three options - Scaleup, Go bankrupt or Merge with a bigger company. While mergers are a common theme, it means relinquishing control of your Startup to the larger company. The other alternative is to Scaleup and if you don’t know how to get your business to Scaleup, then visit our website and we will be happy to help. 

Final note to founders and entrepreneurs

Running a Startup may seem like a daunting task and yes it is. But there are a few steps to follow to increase your chances of success and these are;

1. Have an idea
2. Find a niche industry or target market
3. Develop a business model
4. Attract investors and get funded
5. Scaleup

While the first few steps can easily be accomplished with research and market surveys, the later steps require more than that. You need access to resources, connections and information to help you stay afloat. At Epirus Ventures, we do all these and much more. Not only do we provide you with the resources and connections you need, we bring a hands-on-approach that means guiding you all through your entrepreneurial journey because we believe in YOU. This is what sets us apart. To know more about Epirus Ventures visit our website on https://www.epirus.vc/.