They have been listed some differences between startup and small business, Which allowed a better understanding of this concept. However, there is still present some signs that the startup no longer startup. There is a change that is the most coveted by entrepreneurs: startup of the Unicorn and that is not very easy to achieve.
As seen in the article on definition of startup, an startup is a culture and innovation mindset based on a business idea that solves problems. So this is driven by the ambition to achieve success and the way there is a challenge facing many difficulties along the way. However, startup It is temporary and it is important to understand when it is that this becomes a normal designated airline.
The transition takes place when a startup find a business model and a product suitable for the market and, therefore, it is set to grow.
There are signs that allow a more direct identification of this phenomenon and are listed below.
Begins to acquire other startups
If your startup It is well established as to have possibilities to buy other startupsThen probably is not facing a startup.
The risk phase was outdated
According to Investopedia, Risk is defined as an opportunity that comes up with the possibility of losing some or all of the investment. Now, as startups have this aspect of uncertainty, therefore, this concept is also related.
If there is no longer the need for large investments or if the entrepreneur no longer have to sacrifice their personal investments to ensure the company's evolution, then this probably is not in phase startup.
Have more than 30 employees
If the number of employees has doubled or even tripled since the opening of business or if it has multiple offices, agencies or global headquarters, then the business is no longer considered a startup.
Another sign is when the very common startup It has own recognition in the market. That is, when it does not need to associate with other brands best known to captivate partners or customers. Occurring this, then, it is no longer facing a startup.
When employees are well paid
Finally, we have the monetary issue. When the business is profitable enough to have cash reserves in the bank and ensure that employees earn good salaries and benefit of other benefits, then it is no longer facing a startup.
In addition to these signals, there is a well-known rule that determines when a startup leaves or not to make the transition and startup of the Unicorn. The writer of TechCrunch and entrepreneur Alex Wilhelm defined its own rule 50-100-500 that according to this, if a company exceeds any of these criteria is no longer considered startup: Revenue run rate of 50 million dollars (within 12 months), have 100 or more employees or be evaluated by more than 500 million dollars.
There are many metrics used to define startups, Such as the number of employees, number of financing rounds and revenue. However, we must remember that a startup It goes beyond numbers, and also considered a state of mind.
What's beyond startup?
Due to the intensification of fame achieved by this world of entrepreneurship, probably all people have encountered the use of terms scaleup e unicorn news sites, newspapers or even on social networks. But do you know what they really mean? We will explain below these concepts.
An scaleup It is based on scalable business model created during its startup phase. Therefore, these companies can increase their productivity and improve their financial results without the costs grow at the same pace.
These are also a group of high-growth companies. In more detail, they grew by 20% per year for 3 consecutive years (whether financial growth whether growth in the number of employees).
Scaleups They are usually small and medium-sized enterprises, as opposed to the common association of this concept with large companies. For a company to be scaleup not just be a rapid growth momentum, but there is a sustainable business model, that is, over time its growth is weighted by the profit margin associated.
Another difference is in the entrepreneur's profile, where it seeks to create an impact on society repaying the aid it received during this journey is in mentoring or investment in new companies.
The concept of scaleup It is just a phase of the business life cycle. Thus it reaches a level of stability is no longer considered scaleup.
Unicorn They are companies founded after 2003 have a current evaluation of more than one billion dollars. This concept was created by the venture capitalist Aileen LeeThat following an investigation into the startups existing in the 2000s, concluded that only a small percentage of these reached an evaluation of this giant value. As she said, to find startups they reached the milestone of one billion dollars would be as rare as finding a unicorn.
However, this phenomenon is no longer considered so rare as before, and each time we have seen an increase of interest startups by investors, which means that more money is invested in these and hence an increased likelihood of a startup progress on its way of life and achieve the much desired status unicorn.