Startups are different from own businesses or family owned companies. They are inherently new ventures with a highly innovative and disruptive content and are typically conceived to be scalable. While the gestation period could have lots of similarities, startups are meant to have much faster rates of growth and a more open capital structure than own (small) businesses (could be small consulting initiatives, shops, boutique service providing teams) and family owned companies (typically bigger, more established and with structures that resemble corporates). There can be startups of any kind and operating in lots of sectors even if, a tech component is typically what defines them best
Many people (especially after university or after their first work experience) are drawn to startups for their innovative and (lately) inherent tech nature. More rare are startups founded by mid career managers or senior executives but they do exist and are increasing rapidly. Others are attracted by the hopes of making tons of money and becoming famous. And still others are attracted to start their own venture because of the independence that it entails.
Autonomy and independence
Informal setting and very agile decision making. No bureaucracy
Flexibility and the possibility of important job position while not having much experience
Broad span of control across every little detail
Possibility to shape the team to one’s liking
Vibrant and innovative environment
Rewards are worth the risks
Founder (or cofounder) that has launched an MVP without external funding (Entry level)
This is a startup in its earliest stages: usually both pre-seed and pre-revenue with a bare-bones MVP available for piloting in closed beta to prove product market fit.
Founder (or cofounder) that has successfully raised some outside money (Amber level)
This is a startup that has successfully tested its MVP with select customers, it has raised some external money (usually from an angel investor) and is thus no longer pre-seed (potentially still pre-revenue). It has opened up its product for public use or is preparing to do so soon.
Founder (or cofounder) that has successfully surpassed A-series fundraising level (Bronze level)
This is a startup in full-swing that has successfully proven product market fit and commercial validation (usually already having a clear revenue model in place. At this stage the money raised is usually directly re-investing towards scaling up the team and operation.
Founder (or cofounder) that has successfully surpassed B-series fundraising level (Silver level)
This is a startup which is scaling up at an exponential rate (both in terms of business growth and team growth), has a strong user/customer base, is making robust revenues and beginning to plan a concrete road to profitability.
Founder (or cofounder) of a startup at IPO or pre-IPO level (Gold level)
This is a startup on the verge of no longer being called a startup, it is still growing fast while also achieving operational excellence. Financially it has strong revenues and profitability is within sight. It is now looking to float on the public markets.
A startup cannot remain a startup forever, typical exit points are either becoming a well established company (public or private), being absorbed by a larger entity or dissolving the venture. A startup founder (or cofounder) will usually exit either by selling to a strategic player (competitor or old economy incumbent), performing an IPO or having a profitable enough model (and sufficient managerial competencies) to continue scaling in private. In the case of an IPO (depending on how much is floated and on the appetite/competencies of the founder/co-founders) the founding team may or may not stay on board (in operational or advisory roles).
The personality of someone suited to found a startup typically has some of the following character traits:
The startup path attracts people who are:
Startup founders and co-founders, especially at the start of the new venture, work either alone or with very few team mates. This brings them to a broad role set up. They define, refine and communicate the vision, develop the product, identify and hire the team, manage the admin tasks to the forming enterprise…all in all, a very eclectic role.
Usually the team consists of someone more tech focused and another more marketing or finance focused.
Founders and co-founders also manage relationships with angel investors or VC funds which usually are more competent but don’t always have the same long-term interests.
While you set your own pace, the typical watch against the clock of fundraising affects work/life balance. More than just hours worked, it’s your business, your baby and requires a lot of your attention. It's difficult not to bring it with you everywhere and anytime, at least in your mind.
No frills, no perks, no structure, no support. Especially at the beginning you (and your co-founding team mates if you have any) are on your own.
In some cases, your own net worth is at risk. Same for your reputation.
If you raise money from family and friends, you may face huge ethical dilemmas and a certain degree of discomfort.
Going down the startup route may take you off the traditional job market and make it difficult to re-enter later on if you want/need to.
Even if the idea succeeds it is difficult to recognize what skills you need and to actually find them.