Startup
An early-stage company designed to grow fast and scale a repeatable business model.
Definition
A startup is a young company founded to develop a unique product or service, bring it to market, and scale rapidly. Unlike traditional small businesses, startups are designed for explosive growth and often rely on venture capital to fund operations before they become profitable. Most startups operate at a loss for years while building toward a dominant market position.
Why it matters
If you work at a startup, your compensation likely includes equity, which could be worth a lot or nothing depending on the company's trajectory. Understanding what makes startups different helps you evaluate your total compensation package.
Example
A SaaS company founded in 2023 raises $3M in seed funding to build an AI-powered analytics tool. It has 5 employees, no revenue yet, but a plan to reach $10M ARR within 3 years.