What Is A Start-Up?

What Is A Start-Up?

Nowadays, if you want to start a business, you have many options available. Start-ups represent a very exciting choice, and their popularity has grown over the last few years.

Nowadays, if you want to start a business, you have many options available. But what is a start-up? Start-ups represent a very exciting choice, and their popularity has grown over the last few years.

But even though you can see so many start-ups out there, sometimes you might not know what they are and what they imply – especially if you’re new in the industry. Are you curious about what a start-up is, where they originated from, and why they’re everywhere? This article covers everything you need to know.

What Is A Start-Up?

Start-ups are companies that have just been established and are still during their earliest stage in the process. These newly established ventures are usually built around an idea that the founders think will have a business impact. A common theme that is evident across all start-ups is a need to solve a problem. This can be through an innovative and often efficient way. Not to mention that a start-up is often built around a committed, hard-working team that shares a similar view about the business.

The early stages

In the early stages, a founder will either keep the project as small as possible, or they will look to employ the right talent. As start-ups are often ‘lean’ founders need to make sure that they are hiring staff with enough skills and knowledge to support the business goals. This is a stage that happens before the start-up is turned into a big business. Recruiting the right talent is always one of the biggest challenges for start-up owners. Since the business is still ‘lean’ it is essential for them to build the right team.

Furthermore, a start-up is usually bankrolled. Depending on the size and scalability of the start-up, it may require venture capitalists to provide some funds – implying the entrepreneur wants to keep the business in the long-term.

Where Did It Originate From?

The term “start-up” has emerged to let entrepreneurs refer to a new company in its earliest stage, one that has the potential to grow and become a successful business. This growth would usually rely on technology, mostly because the Internet was, even during the ‘90s, an important aspect of every company.

The term “start-up” comes from the U.S., specifically from the ‘70s, and it has grown in popularity during the ’90s. During the 2000s, the term eventually became more known and evolved into how we know it today.

It was also created to make it easier for business people to make the difference between entrepreneurship as they knew it, and business with growth potential. Because everything was so dependable on technology, even nowadays the term is associated with high-tech.

Many of these start-ups used to crumble as they lacked long term planning, revenue or they struggled to solve an inherent problem. But that doesn’t mean they are all doomed to fail – a lot of companies survived over the years and are now big businesses. Such examples include Airbnb and Facebook who were once small ideas that were operating out of tiny workspaces.

What to Consider when Building a Start-Up?


Funds are a must if you want to be able to establish the start-up, that’s a fact. Start-ups generally grow thanks to venture capitalists, which are specialised in providing funding for a start-up. However, you can also get funding through crowdfunding, where people contribute to your start-up if they believe in its potential.

A start-up business loan may also work when you need funding. If your business is operational and you are generating income, you can apply for a business loan. A business loan can help you scale your startup. Use your loan to hire staff, purchase inventory, pay off taxes, marketing, and advertising and more. So, whichever you choose, make sure you’ll have enough funds.


Where is your company going to operate? Will you choose a physical location such as a store, office or home office? Or you’d rather go for an online operated business? You need to know this depending on the type of services or products you’re going to sell. Many new start-ups are now operating out of co-working spaces. These start-up communities are a great way to build a strong support network. Take a look at your plans and decide based on your offers.

Legal Structure

When you’re establishing a start-up, you must consider what legal structure will best work for you. Is a partnership the way to go or a proprietorship ideal? The latter works if you’re the company’s key employee and founder at the same time, whereas the former is best if your business will have multiple people involved in ownership.

Why Are They a Good Choice?

A start-up can be a very good choice if you’re newer in the market and want to test the waters before emerging into a full business. They can bring new innovations to the market – and they can create a lot of new jobs. In this new wave of learning, startups offer a large opportunity for young people with undiscovered skills to solve complex business problems.

At the same time, start-ups consume fewer resources. Most startups operate as lean businesses who operate from a laptop or single desk. The opportunity to change the world can happen within a single square meter.

If you have an idea then go for it!

If you have an amazing idea and want to bring it to the market, a start-up is a great chance to do so. You just need to make sure you choose the right legal structure based on what the product/service is going to be. If you’re worried about how to fund the business, remember that there are venture capitalists and loan providers who can help you get the right funding.

For more information on business loans, commercial finance, debt consolidation, bad credit business loans and low-doc business loans talk to our experienced and understanding loan specialists to see how our business loans can support your business goals.

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