TYPES OF START-UPS

TYPES OF START-UPS

A. A lifestyle firm is privately held and usually achieves only limited growth.

1. This type of firm may grow after several years to 30 or 40 employees.

2. A lifestyle firm exists primarily to support the owners and usually has little growth opportunity.

B. Foundation Companies.

1. A foundation company is a type of company formed from research and development and lays the foundation for a new business area.

2. This firm can grow in five to ten years from 40 to 400 employees.

3. This type of start-up rarely goes public and draws little outside investor interest.

C. High-Potential Venture.

1. This type of venture receives the most investor interest.

2. The company may start out like a foundation company, but its growth is far more rapid.

3. After five to ten years the company could employ around 500 employees, with $20-30 million in revenues.

4. These firms are also called gazelles and are most important for the economic development of an area.