Startup

The first known investment-based crowdfunding platform for startups was launched in Feb. 2010 by Grow VC, followed by the first US based company ProFounder launching model for startups to raise investments directly on the site, but ProFounder later decided to shut down its business due regulatory reasons preventing them from continuing, having launched their model for US markets prior to JOBS Act. With the impact of the JOBS Act for crowd investing in US, equity crowdfunding platforms like SeedInvest and CircleUp emerged in 2011 and platforms such as investiere, Companisto and Seedrs in EuropeEurope and OurCrowd in Israel. The idea of these platforms is to streamline the process and resolve the two main points that were taking place in the market. The first problem was for startups to be able to access capital and to decrease the amount of time that it takes to close a round of financing. The second problem was intended to increase the amount of deal flow for the investor and to also centralize the process.

The first known investment-based crowdfunding platform for startups was launched in Feb. 2010 by Grow VC, followed by the first US based company ProFounder launching model for startups to raise investments directly on the site, but ProFounder later decided to shut down its business due regulatory reasons preventing them from continuing, having launched their model for US markets prior to JOBS Act. With the impact of the JOBS Act for crowd investing in US, equity crowdfunding platforms like SeedInvest and CircleUp emerged in 2011 and platforms such as investiere, Companisto and Seedrs in Europe and OurCrowdOurCrowd in Israel. The idea of these platforms is to streamline the process and resolve the two main points that were taking place in the market. The first problem was for startups to be able to access capital and to decrease the amount of time that it takes to close a round of financing. The second problem was intended to increase the amount of deal flow for the investor and to also centralize the process.

At this point the company may already have traction and may be making revenue. In Series A rounds venture capital firms will be participating alongside angels or super angelsuper angel investors (however, sometimes only venture capital firms will participate). The next rounds are Series B, C, and D. These three rounds precede any potential IPO. Venture capital firms and private equity firms may be participating. Sometimes, the A or B rounds can be extended in what is called an A prime or B prime.

• Innovation perspective: This definition requires the company to have some kind of innovation on technologytechnology, distribution or business model in order for it to qualify being a startup as opposed to a 'lifestyle' or family owned business.

Startups have several options for funding. Venture capitalVenture capital firms and angel investors may help startup companies begin operations, exchanging seed money for an equity stake in the firm. Venture capitalists and angel investors provide financing to a range of startups (a portfolio), with the expectation that a very small number of the startups will become viable and make money. In practice though, many startups are initially funded by the founders themselves using "bootstrapping", in which loans or monetary gifts from friends and family are combined with savings and credit card debt to finance the venture.

After the Great Depression, which was blamed in part on a rise in speculative investments in unregulated small companies, startup investing was primarily a word of mouth activity reserved for the friends and family of a startup's co-founders, business angels and Venture Capital funds. In the United StatesUnited States, this has been the case ever since the implementation of the Securities Act of 1933. Many nations implemented similar legislation to prohibit general solicitation and general advertising of unregistered securities, including shares offered by startup companies. In 2005, a new Accelerator investment model was introduced by Y Combinator that combined fixed terms investment model with fixed period intense bootcamp style training program, to streamline the seed/early stage investment process with training to be more systematic.

After the Great Depression, which was blamed in part on a rise in speculative investments in unregulated small companies, startup investing was primarily a word of mouth activity reserved for the friends and family of a startup's co-founders, business angels and Venture CapitalVenture Capital funds. In the United States, this has been the case ever since the implementation of the Securities Act of 1933. Many nations implemented similar legislation to prohibit general solicitation and general advertising of unregistered securities, including shares offered by startup companies. In 2005, a new Accelerator investment model was introduced by Y Combinator that combined fixed terms investment model with fixed period intense bootcamp style training program, to streamline the seed/early stage investment process with training to be more systematic.

• Innovation perspective: This definition requires the company to have some kind of innovation on technology, distribution or business modelbusiness model in order for it to qualify being a startup as opposed to a 'lifestyle' or family owned business.

The startup ecosystem consists of the individuals (entrepreneurs, venture capitalists, AngelAngel investors, mentors); institutions and organizations (top research universities and institutes, business schools and entrepreneurship programs operated by universities and colleges, non-profit entrepreneurship support organizations, government entrepreneurship programs and services, chamber of commerce) business incubators and business accelerators and top-performing entrepreneurial firms and startups. A region with all of these elements is considered to be a "strong" entrepreneurship ecosystem. Some of the most famous entrepreneurial ecosystems are Silicon Valley in California, where major computer, Internet firms and top universities such as Stanford University create a successful startup environment, Boston (where Massachusetts Institute of Technology is located) and Berlin, home of WISTA (a top research area), numerous creative industries, leading entrepreneurs and startup firms.

Factoring and venture debtventure debt is another option, though it is not unique to startups. Other funding opportunities include various forms of crowdfunding, for example equity crowdfunding, in which the startup seeks funding from a large number of individuals, typically by pitching their idea on the Internet and ICOs (Initial Coin Offerings).

After the Great DepressionGreat Depression, which was blamed in part on a rise in speculative investments in unregulated small companies, startup investing was primarily a word of mouth activity reserved for the friends and family of a startup's co-founders, business angels and Venture Capital funds. In the United States, this has been the case ever since the implementation of the Securities Act of 1933. Many nations implemented similar legislation to prohibit general solicitation and general advertising of unregistered securities, including shares offered by startup companies. In 2005, a new Accelerator investment model was introduced by Y Combinator that combined fixed terms investment model with fixed period intense bootcamp style training program, to streamline the seed/early stage investment process with training to be more systematic.

The startup ecosystem consists of the individuals (entrepreneurs, venture capitalists, Angel investors, mentors); institutions and organizations (top research universities and institutes, business schools and entrepreneurship programs operated by universities and colleges, non-profit entrepreneurship support organizations, government entrepreneurship programs and services, Chamber of commerce) business incubators and business accelerators and top-performing entrepreneurial firms and startups. A region with all of these elements is considered to be a "strong" entrepreneurship ecosystem. Some of the most famous entrepreneurial ecosystems are Silicon Valley in California, where major computer, Internet firms and top universities such as Stanford University create a successful startup environment, Boston (where Massachusetts Institute of Technology is located) and BerlinBerlin, home of WISTA (a top research area), numerous creative industries, leading entrepreneurs and startup firms.

Stereotypically, Startup founders sometimes have a more casual or offbeat attitude in their dress, office space, and marketingMarketing, as compared to traditional corporations. For example, startup founders may wear hoodies, sneakers and other casual clothes to business meetings. Their offices may have recreational facilities in them, such as pool tables, ping pong tables and pinball machines, which are used to create a fun work environment, stimulate team development and team spirit, and encourage creativity. However, this view is changing as traditional corporations take on 'startup' like characteristics, the definition of 'startup' expands to include more exceptions than the rule. Typical examples of companies that were considered startups at some point include Facebook, Snapchat and Google which are now considered by some to now not be a startup as they have crossed a weakly defined threshold of size.

A company may cease to be a startup as it passes various milestones, such as becoming publicly traded on the stock market in an Initial Initial Publicpublic Offering (IPO)offering, or ceasing to exist as an independent entity via a merger or acquisition.