What is a startup?

I remember how many times I heard the word startup before I decided to Google What is a startup? I thought maybe it was just a “cool name” that was given to companies today.

The reality is that the internet has come to change everything, from the way we communicate to the way we do business and that’s where the term “startup” comes up.

Before, starting a business or company was a risk that only people with large capital could take, but fortunately times have changed.

What is a startup?

The main difference between the definition of a company and the definition of a startup is that a startup is an organization with great capacity for change and that has a strong relationship with technology.

In general, they are businesses that promote innovative technological ideas through products or services completely oriented to the customer. At the same time, startups are characterized by operating with minimal costs and obtaining exponential profits.

In fact, companies like Facebook or Amazon started being startups despite the fact that today they have become major multinational references for the technology industry.

In Spain, have also emerged startups that today are giants of commerce such as Glovo or Cabify.

Want more examples? Bitsa! Our startup was part of theFinTech Unconference 2019 in Madrid in 2019, in an event that brought together more than 300 startups with the most important innovation projects in Spain.

How to finance a startup

When it comes to understanding how to create a startup it is important to consider how to find financing to create our own startup. Among the methods available, we can highlight 4 of them:

1- Investment

According to various studies, a startup needs at least 5,000 euros to be able to be created. Imagine that you should consider trademark registration, creation of a trademark identity, notary fees, etc.

Many of them decide to simply borrow money from friends or family, or resort to tools like crowdfunding or bank loans.

2- Business Accelerator

In a second phase, we can find ourselves as the famous “accelerators” that as their name indicates are dedicated to accelerating the progress of startups.

In addition to trying to make the funding obtained “faithful” to the entrepreneur, they improve and facilitate the financing process.

3- Traditional Investments

This type of investor also sees startups as a very good source of income, often with returns unthinkable for other types of companies.

In general, this level of investment provides higher amounts that allow startups to dream about what they always wanted to be.

In addition, this category also includes the figure of “Angel Investor” who not only brings money, but also contacts and experience to the project.

4.- Venture Capital

Also translated as “venture capital”, this is a type of financial operation in which investors contribute capital to startups with high growth potential in exchange for certain percentages of participation within the company.

It is a widely used practice in the world of investments and allows startups to get financing without taking large risks.