1. A company that is in its earliest stages of formation and operations, often bootstrapped (i.e., funded by their founders), as they endeavor to create a product or service designed to fill a market need or demand. While many startups enjoy strong initial success and hype, most are not sustainable without additional investment from outside sources and a well-crafted business plan. This is why the majority of startups seek financial support from venture capitalists.
A thoughtful business plan is the key to long-term success for any startup. And that plan starts with funding. Depending on the business and its financial needs, it may be able to sustain itself through bank loans or crowdfunding until a more long-term source of funding is found.
Next, the founders need to determine what kind of business they will have (in terms of its legal structure). While sole proprietorships and partnerships are easy to set up, they provide almost no shield against financial or legal liability. This means that business debts become personal debts, and lawsuits against the business are the liability of its owners. While it takes a bit more work and planning, founders may want to start their business as a limited liability company, which creates a clearer barrier between personal and business liabilities.
Finally, startup founders need to think long-term. The dotcom boom/bust of the 1990s taught us that a company created to fill a specific niche can quickly go out of business if the landscape that it operates in undergoes a significant change. Contingency plans and diversity of products/services are crucial.
2. Popular culture: A 1990s freestyle dance move in which the performer mimes issuing shares of stock followed by the gesture for “making it rain” money. This dance had far less appeal than other crazes like the Macarena.
Bill founded a startup in the 90s focused on helping people work online more efficiently despite very slow internet speeds. He knew he would need to diversify, however, when increasing internet speeds made his particular business model obsolete.