Types or startups
Not every startup is the same, and the following 8 startup types or categories can be distinguished;
Lifestyle startups - aim to live your passion
These are small-scale enterprises, with limited growth opportunities, usually only the owner/founder with sometimes a few employees, who put a specific business activity on the market from an intense passion. You can mostly identify the business set-up and appearance by enjoying an individual, recognisable lifestyle and the goal of generating sufficient income for this lifestyle. Lifestyle startups are mainly in the sectors; consumer or business services, such as sailing camps, nutrition experts, gyms, but also; creative professions, entertainment & hospitality.
Charitable foundation startups - make the world a better place
Private or public funded non-profit organisation which donate and/or support philanthropic purposes. Those charitable deeds could include aspects of human society and culture, research and development that could lead to business initiatives. As a company, a charitable foundation can grow to organisations with 25 to even more than 500 people in a period of 5 to 10 years.
Small startups - work to feed the family
These small companies, owned/managed by family or associated business partners, make up the most substantial part of the economy and thus for local employment. They are relatively easy to start because only a limited amount of capital is needed. The primary goal of the owners is to be 'own boss' and to acquire sufficient income for the family. The companies often do not invest much, partly because the companies usually do not make a lot of profit. A striking feature is that the employees are often family relatives, good friends or acquaintances of acquaintances.
Buyable startups - generating another ready for sale
The purpose of these startups is to earn a lot of money quickly, such as at M&A, reselling a larger company for $ 5-50M. The money earned will be reinvested in a new activity, in order to develop it again and sell it again with a sure profit to those who can benefit synergy.
High potential startups - everybody wants to be a winner
These are the fast-growing and quickly profitable companies. For these startups, there are many supporting initiatives such as incubator and accelerator programs and are extremely attractive to invest in especially for angel investors. Potentially, such high-potential startups can be estimated on average, in a period of 5 to 10 years, with a turnover of $ 20-50M with approximately 100 to 400 employees. They are therefore essential for the economic development of a particular region.
Foreign investments startups - translocate for profit
Investments for starting a new business activity abroad. This could be penetrating new emerging markets with just a sales office or an entire business organisation. For the motives to produce overseas in another country because it is attractive due to cost advantage or the presence of specific resources.
Large company startups - innovate and develop to remain
Short-term life cycles, the need for innovation and increasing competition are reasons for larger companies to adapt existing business models and to invest in new activities. A strategy to get a sufficient balance in the company portfolio. Efficient development of new structures and skills of the company to be future proof. Sometimes this can mean disruptive innovation or entirely new products or new customers in totally new markets.
Scalable startups - born to be a giant
Powerful business models; high reward returns but with high risk, repeatable business model, innovative, extraordinary high growth, high margin and immense distribution potential, are the characteristics of scalable startups. Potentially, scalable startups could grow to an annual turnover of $ 1 billion or more. Although the general picture is different, the scalable startups represent only a small percentage of all startups. The outsider return expectations and thus the attention of venture capital investors (venture capital & angel investors) and media coverage are the cause of this.