The World of Start-Ups: The CEO's Secret Weapon
Start-Ups. It's a buzzword that's being thrown a lot in the news and social media these days. The term might be overused to the point that it has become synonymous with a small business or a company made up of a bunch of hopeful twenty-somethings with big dreams and ideas. That's not entirely wrong either.
<aside> 💡 Start-Ups are typically founded by one or more entrepreneurs with the goal of providing a unique and innovative product or service.
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Start-Up founders typically use their savings, inheritance, or financial support from their family and friends. These companies generally start with high costs and limited revenue, which is why they look for capital from a variety of sources such as venture capitalists, crowdfunding, and loans.
This type of funding source is also known as seed capital. This capital is provided by private investors such as the founders' family and friends —usually in exchange for an equity stake in the company or for a share in the profits of a product.
Here are some terms to remember:
| Venture Capitalist | An investor in companies or projects in which there is a substantial element of risk |
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| Crowdfunding | The practice of funding a project or venture by raising many small amounts of money from a large number of people, typically via the internet |
| Loans | A sum of money that is borrowed and expected to be paid back with interest |
| Equity | The value of the shares issued by a company |
Just like any other business, startups make money from having a profitable product or service. Startups need to make sure that their business model is sustainable and scalable. They do this by following a few, simple rules.
Rule 1
Hire the best talent in the industry to spark fresh and innovative ideas while operating at a high level even on a small scale.
Rule 2
Create, develop, and constantly improve a unique product or service at a competitive price.