Startups Explained.
An entrepreneur at the most basic level is an individual who seeks an original path in creating their own business venture often times with high risk, potential high reward, and need for innovation/change in their industry.
Did you know the top 3 industries where business startups usually start? Business services, retail and food. There are also certain qualities attributed to entrepreneurs like being dreamers, fast learners, problem-solvers, risk-takes, and people who are persistent/curious.
Entrepreneurship brings value to our lives through innovation and novelty and plays a key role in any economy using skills/initiative to anticipate needs to bring ideas to the marketplace. Those who become successful in this endeavor often times keep most of the financial gain, gain a more public profile, and continued growth through opportunities and ventures with other individuals and companies.
What is a start-up? Startups are companies in early stages of growth founded by a person with a service or product that is new or more unique than other ones in its niche (or maybe in a category of its own) and has opportunity for scaling through building systems, operations, and ideas to let it breathe on a large scale.
One of the leading concerns among rising entrepreneurs is access to funds to get their projects either off the ground or expand the organization. Another concern is bureaucracy structures that can set them behind on their objectives as well as hiring the right people.
Here are the 4 types of Entrepreneurship according to Investopedia:
Start-ups that can Scale: This all starts with a concept which upon growth can scale to multiple markets, and can comprise of a product or a service.
Large company: This type of entrepreneurship is within an actual company and can branch out into other sections. The leaders of these companies often see a new market to dive into.
Small business: This is the idea of opening a business without turning it into a conglomerate & single location stores count as such. These individuals invest their own capital to turn profits.
Social entrepreneurship: Help the community through their products and services and more driven by impact compared to services.
So how do you finance these ventures? Capital funding can be very difficult and this can be done by cutting costs or “going lean",” reducing inventory, using their own money, and taking on partners armed with greater access to capital through the form of VC (venture capital) firms, angel investors, hedge funds, and even more traditional forms such as bank loans.
When entrepreneurs give equity in their companies to investors, this can result in the investor not only owning a share, but also guidance, a more long term relationship, and mentorship (as well as often times another individual to answer to).