What is Startup? To be successful with Startup, what do you need to do?
Startup is considered as a golden land for the young generation to boldly "fly high, fly far" to assert themselves. Financial autonomy, building a healthy and potential business model as well as contributing to the improvement of society are always the orientations that young people "ignite" and aspire to do. So what is Startup?
About Startup
What is Startup?
Startup is temporarily understood in Vietnamese as starting a business . This is considered a form of business to provide new products and services under uncertain conditions. It can be seen that Startup is a noun to refer to businesses that are in the early stages of business orientation and development.
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These business ventures are usually started by 1-3 founders. They focus on capitalizing on market demand by developing certain products, services or technologies that are viable. The start-up capital provided to keep the company running is usually invested by the founder.
In the early stages of a startup, it is often small in scale, low in consumption, but high in cost, so it is often unstable. That's why startups often participate in fundraising from investors or venture capital funds.
Startup's Goals
When it comes to Startup, people often assume that Startup is always aiming for a time when there is no more Startup. This can be understood as Startup is a period of countless challenges, innovations and experiments. It is a journey of research, testing, analysis, and testing. Therefore, many departments are still thinking about Startup only for small businesses.
In fact, a Startup business will remain in the Startup status if they realize that they have not really completed all the steps to become a true company. The Startup phase usually takes place with an average time of 1-2 years, but there are startups that take up to 5 years. During that time, they were constantly searching, innovating and adjusting the appropriate company, may fail and then start again, firmly believing in the words of billionaire Pham Nhat Vuong: " Forever the entrepreneurial spirit. "
The top goal of Startup can be seen as adjusting the business scale to suit reality, establishing a viable and stable model to be able to generate profits, standardizing and expanding. more in the future.
Profit maximization, finding customers as well as enhancing brand value is a problem after the business has stabilized its business model.
Therefore, Startup misidentifies the goal, the risk of failure will be very high.
What methods are used to value startups?
Pricing through expenses
Cost is the amount of money that a business must spend to pay for its production and accompanying services. This method gives investors a clear idea of how much the business is spending.
On the other hand, this also partly reflects how much tangible assets the company has. However, the cost method of valuation will be difficult to consider the issue of intangible assets as well as the true potential of the company in the future.
Pricing through market access
The usual market approach is taken by the investor to compare with similar, segmented companies that have recently been acquired in the business. It is important that Startups often do not assume that no other company can be compared, even if the revenue is similar, there are mandatory terms that Startup cannot be made public.
Therefore, this valuation method cannot be used alone to accurately assess the size and development potential of the business.
Valuation using the cash flow approach
The cash flow approach is often used by investors to decide how much to invest in a business. The discounted cash flow approach will be based on the business's expected future cash flows, but this is often subjective.
Pricing by stage of development
This is considered the simplest and easiest to understand valuation method.
Investors will look at each development milestone of the business to decide to invest. The more startups grow, the lower the risk will be and the business valuation will be higher. Thanks to that, the opportunity for startups to raise capital will be more likely.
Berkus Valuation
The Berkus Valuation Method was founded by Dave Berkus. This is known as the method applied to businesses that do not have a clear revenue and completely rely on the development of Startup. When startups are not profitable, investors will use this method to call for capital to value the business.
Explore the development stage of Startup
Regardless of the starting point, the startup model, the field, they all have in common that the development journey has to go through the four stages below.
Stage 1: Orientation
During this phase, the Startup will set up ideas and make a specific business plan . This start-up phase is the first steps, plays an extremely important role in deciding half of the success or failure in the journey ahead of a Startup.
Stage 2: Challenge
Completing phase 1, entering phase 2 is when Startup reaches out and takes on arduous challenges with many objective and subjective obstacles. This is the period when most startups in Vietnam fail and have to change their business model.
Stage 3: Integration
Going through the initial challenges, this stage is often called the dream stage of startups. At this time, the Co-founders will set out long-term target plans and start implementing them according to the plans and plans set out at a rapid rate of development.
Above are the sharing about Startup and issues related to Startup that are synthesized and sent to you by Tino Group. Hopefully, through the article, you have had an overview of Startup, made for yourself wise choices and wholeheartedly with the decisions on your life path!
Good luck!
FAQs about Startup
What are the legal issues that startups need to pay attention to?
Choosing the wrong business model
Website Terms of Use
Intellectual property rights
Prepare all legal documents as required by law
Who can start a Startup?
Whoever you are, you can start a business if you want. However, today's startup ideas are mainly formed by people who are passionate about getting rich and creative, especially young people full of energy and enthusiasm. Starting a business is never an easy choice, it's not for everyone. But if you are determined enough, persistent enough, brave enough to face all challenges on the path of Startup, then perhaps this is the right path for you.
Does a startup need to be creative in science and technology?
Startup needs to be creative in science and technology, but it is not enough. Startups do not always appear in the field of technology. But one thing is for sure, startups often use technology to solve problems and technology is everywhere. Living and developing in a rapidly developing technology era, everyone needs to hone their technology skills. Therefore, it is necessary for Startups to be creative in science and technology
What elements does a startup need to equip?
Startup is never easy, so entrepreneurs need to converge qualities and skills such as:
Patience and determination
Financial management skills
Planning and strategy building skills
Endless creativity