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Start-up
Practical Law ANZ Glossary w-013-2162 (Approx. 3 pages)
Glossary
Start-up
The usage of this term varies widely, making it difficult to pin down a precise definition. Generally, the term is used to describe a company that has the following traits:
- It is a proprietary company.
- It uses invested capital (as opposed to reinvested profits), often from venture capital investors, to build an innovative, growth-focused, scalable business.
- It has the eventual goal of selling the company or undertaking an initial public offering (IPO) to provide liquidity to its investors.
The following types of companies may sometimes also be referred to as start-ups:
- Proprietary companies in any industry that were very recently formed and have not yet raised capital, or that have only raised modest amounts of capital from the founders' friends and family or angel investors. These types of companies are often referred to as unfunded start-ups or seed-funded start-ups, respectively.
- Proprietary companies that have received venture capital investment (often referred to as funded or venture-backed start-ups).
- Proprietary companies that have been spun out of larger businesses to focus on products or services that may be competitive with the larger corporate group's core businesses.
- Growth-focused proprietary companies in any of the following industries:
- consumer internet or e-commerce;
- software;
- digital media;
- social media;
- telecommunications and mobile technology;
- biotechnology and life sciences;
- clean technology;
- pharmaceuticals;
- medical devices;
- information technology;
- advertising technology;
- financial services and payment technology (often referred to as FinTech);
- semiconductors;
- hardware;
- nanotechnology; or
- robotics.
- Any small, innovative proprietary companies, regardless of industry.
For a list of resources related to start-ups, see Toolkit, Start-up companies.