Startup has lost it’s meaning!

Let's Talk!

 

Screen Shot 2015-01-03 at 15.32.10

Startup, a term bandied round like funding in the tech bubble, but what does it really mean and has it lost it’s original meaning.

The standard belief is that a startup is a small company with potential for excessive growth with the cumulative goal of it becoming the next tech titan.

However, is that really correct? If so, should the mass of tech companies be attributed with the class of ‘startup’? Is Airbnb really a startup still? Hell no.

So if the likes of Airbnb and Uber are deemed to have lost their designer ‘startup’ status, what really is a ‘startup’ in today’s tech sector? Well everyone has very different definitions, however, it is my belief that a company may be judged to be a startup based on three different criteria:

  1. Valuation: If a company is worth more than $250 million, leave your startup status at the door.
  2. Revenue run rate: If this exceeds $35 million, sack the startup name and call yourself a tech company.
  3. Employee count: If you have over 100 employees it’s time to start targeting or avoiding the looming IPO.

If however, you do not exceed these limits. Awesome job. You can keep the startup badge on for all to see. Just to show an example, Timehop has team of 11 and at last round of funding (May 2014) was given a reported valuation of $200 million. Well done Timehop, you are officially still a startup.