Here are a few startup definitions and Founder Frequently Asked Questions. Do you have a question you’d like answered? Contact Upstarts.
What is a startup?
I define a startup as a business that’s in the developmental stages and pursing a new idea or trying to solve a familiar business issue in a brand new way. There’s a vision for growth, so the product or service must be scalable, and typically, the business isn’t constrained by location. Startups could be developing software or hardware, they might be services focused, or they might be involved with manufacturing or retail. I’ve even met artisans that I would categorize as startups. Startups can be business-to-business (B2B) or business-to-consumer (B2C).
You can read this article from Forbes by Natalie Robehmed for more.
What’s an elevator pitch?
Founders have to be good story tellers if they want to succeed. An “elevator pitch” is a story you can tell about your business in the time it takes to ride up an elevator. You should be able to tell the story of your business in 90 seconds: what it is, why it matters to your customers, how it works, and your stage of development.
Whether you’re talking to potential investors, customers, employees, strategic partners, or evangelists, having a clear, easy-to-repeat story is one of your most important business tools. Your elevator pitch should lead the listener to ask a question that provides an opening for you to build on your story.
Do I need to have partners?
This is a tricky question. Having partners will help if you plan to inhabit the startup ecosystem. One of the key metrics investors use to assess a business is “TEAM”. A single founder is considered a risk for obvious reasons – what happens if you get hit by a bus? – and for some less obvious reasons. If there’s only one founder someone looking in might think you’re not able to inspire others to work with you. It’s also nice to have one or more people to collaborate with, especially people who round out your skillset.
Partners are a good thing, but you must choose wisely. Partners should:
- be as committed as you are,
- be able to bring as much value as you do, though the “currency” can be different, and
- have complementary skills and/or networks.
No matter how close you are, or how much you trust your partners, there will be challenges. If you do have partners make sure you are always communicating and that you have clearly defined mechanisms for dispute resolution.
Read the Upstarts article about choosing and working with partners.
How can I finance my business?
Money is one of the main obsessions of founders. It can be overwhelming for founders, and chasing money can become a trap that prevents you from working on other aspects of the business.
Understanding the types of funding available to founders, and the benefits and limitations of each is something I wish I had understood more completely when I started the business. Click here to view more detailed information about the pros and cons of each of the financing options listed below.
- Friends & Family
- Angel Investors
- Venture Capital
- Strategic Investors
- Tax Credits
- Government Loans
- Business Loans
- Personal Loans & Credit Cards
Do I need to raise money?
This is a question not enough people ask themselves. Many founders make the assumption that we need to go out and raise money, but the truth is that it may not be your best use of time and energy.
Getting early stage money is really challenging and time consuming, especially if this is your first business venture. Seed money is particularly challenging in Canada. See our detailed Funding page for more information. Depending on your business, you may be smarter to start your business with the intention of financing it through revenue and waiting to approach investors when you’re ready for growth.
Whether you’re setting up to generate revenue out of the gate or raising money to finance research, development or marketing, there is going to be a period of time that you’ll be “bootstrapping”. Decide how that time would be best spent by looking at the type of business you’re creating, your upfront capital needs, as well as your personal financial situation (and that of your partners).
Most entrepreneurs focus on finding money from friends and family, or angel investors at the early stage. In addition to starting with a view to generate revenue, there are other channels to source financing:
- Strategic partners, i.e. businesses that might benefit from your planned product or services.
- Government funding programs, which include grants, loans and tax credits.