What is internal Start up and how Start up companies funded
Hemlata Khandelwal / 2021-06-19 01:37:15
You must have heard about the company but do you know what is a startup company? People also associate the word StartUp with many new ventures.
They believe that these companies are such that where young people start their new venture, be it any tech-based companies or their innovative product. But the question arises whether this is the meaning of Start-up Companies in the true sense.
The CEO of a big company says that a Start-up is a company that believes in solving a problem whose solution is not obvious and in which there is no guarantee of success.
What is a Start-up?
A start-up company or start-up is called an organization that is designed to achieve a large scalable and repeatable business model. These companies are often newly formed and they are in the development phase which requires strong market research.
The word "Start-up" became so famous because when many new dot-com companies were formed during the dot-com bubble, then people used to call these companies start-up companies at that time. Which gradually became a trend for new companies to be named.
We can also think of a start-up company like a small child, which has still time to move forward. These companies offer such a product or service which was not available in the market earlier, due to which other people benefit a lot from it.
What is Start-up Culture?
Start-ups sometimes give importance to a casual attitude so that the efficiency of employees can be increased in their workplace.
Some people keep themselves motivated to work without incentives.
When this stress was taken out of them, then they found that workers and researchers can focus on their work, which is increasing overall productivity. With this, they are also getting the potential to achieve something more for their company.
This culture is slowly evolving and larger companies are adopting it so that they can capture the bright minds of start-ups. Taking this practice further, Google has bought many such companies in the last few years, which they thought could provide good returns.
With this, employees from such cultures do not have any stress while working and they can give their good productivity to the company. They feel more comfortable so that they can do their work by giving their mind.
Who are the co-founders?
Co-founders are called those people who were involved with them during the growth of start-up companies. Anyone can become a co-founder, whether he is a man of the company or outside.
Mainly there has some various types of co-founders that are Engineers, Entrepreneurs, Hackers, Web Developers, Venture Capitalists, Web Designers, etc.
That's why there is no legal definition of Co-Founders. One can be called a Co-Founder only when he has information about the board of directors, investors, or shareholders and who can keep his intention in front of these people and other employees of the companies, listen to it and execute it.
What are Internal start-ups?
Large and well-established companies often try how to create their innovation, for this, they prepare Set-Ups which are called "Internal Start-ups".
These companies keep on developing as separate entities. And when they come in the market with their new product, then they have to launch it under that company itself.
Large companies also do not need to acquire other companies from this. When they can make their products.
A Start-up is Always Temporary
The organizational function of any start-up is that it should always look for a repeatable and scalable business model. A famous person has said that the Start-up Founder has three main functions:
Give a clear view of theitems and its highlights
Check about the item whether the model of the product is correct.
Frame a range of speculation in justification of all manufacturers and the Model of trade: What are the channels of Distribution? How can a person make and finance the company? Who are the companies customers?
How are start-ups funded?
If we talk about start-up and small business, then in the initial phase it is funded by Founder's savings, friends, family members, or bank loans only.
But if Start-up is successful then it gets additional funding from Angel Investors. And later from Venture Capitalist and then from IPO (Initial Public Offering).
And with such funding, the equity of the start-up founder gets exhausted to a great extent but at the same time, the company's ownership gets diversified.
And in this situation, it is not able to live according to the independent entity of the start-up, which is later acquired by a big company or merges with another company. It may be difficult for a small business owner to lose control like this, but it is very important for growth in a start-up.
If seen, both the start-up owner and small business owner are entrepreneurs, but the primary function and funding of both are different according to their business model.
What is a Start-up Company in India?
Whenever we hear the word “Start-up” then often we are a little confused that what is the difference between these two words “business” and “Start-up”. If you start any new thing in India then it is called only Business and not Start-up. So let's understand what is this start-up company in India.
A Start-up company is very different from a traditional business, that's why I have mentioned some important points below which will help you to understand about start-up companies.
In our up coming blog we'll Read about the Advantages and disadvantages of Start-up companies.