When Is A Company No Longer A Startup?

by / ⠀Entrepreneurship Startup Advice / February 28, 2023
woman working at laptop for startup

A startup is a big deal. You got the business idea, you wrote the business plan all out and now you have the means to have your very own business! A very fruitful moment for sure, but the journey now begins. Now that you have a startup, you need to ensure the retainment of both employees and customers if you want to succeed. But, eventually, you find yourself asking when is a company no longer a startup?

As your company grows, the term startup starts to lose its meaning. This is especially true if you have had the business for 5-10 years. It’s a complicated question with a complicated answer. The reason is that there are a lot of ways to look at a startup and consider it a startup.

This article will go into what a startup is and look at when is a company no longer a startup. With that being said, let’s get started!

What is a Startup?

A startup business is simply a business that has just started. Anytime you see a grand opening, that is usually a startup business. It doesn’t always look like the cool offices of a tech company that you on TV. Many can be just a mom and pop shop that just has limited items for sale.

If it is a matter of time, then how long does it take for a startup to become a company? There is no right or wrong way that a startup is no longer a startup. Below is several different reasons why your startup may become a company.

What Do You Sell?

A company has a product or service to sell, even a startup. A startup gets its business going by having that “it” factor. Something about the product is what draws your customers in. For example, it may be because it is a needed product or service in an area that has little or none available.

See also  10 Sobering Lessons Learned After Teaching 88 Struggling Entrepreneurs For 6 Months

When your company is selling everything off the shelves, then you could consider yourself a full-on business. Part of that reasoning is also because the product or service you provide is completed. A business with half-completed items is hardly a business at all.

What is the Scale of Your Business?

Your business’ success may depend on the scale of your company. A business is not a startup if it has locations in other countries and hundreds of sites across its home country. The scale of your business can depend on several factors. These include:

  • How many employees
  • The valuation of the company
  • How much is being made

Now, there is a technical answer to the question of when a startup is a company. The general rule is that if your business has been going for at least half a decade, then it would be considered a business. A business is also no longer a startup if it is on the stock exchange.

There is also a concept that Alex Wilhelm came up with. It is called the 50-100-500 rule. The way he sees it, a business is not a startup when it:

  • Has over 100 employees
  • The value is over $500 million
  • Make around $50 million in revenue

Now, you don’t have to follow this rule either because if you had even half of this stuff, then it would definitely be a business and not a startup.

What are Your Profits?

Profits are the main goal of a business and you want lots of profit if you want to do well. Money is important because it keeps up maintenance, pays the employees, and gets you new supplies and products when needed.

See also  Using Apps in Web 3.0 Marketing

Now if you are interested in knowing your profits and if it qualifies you to be a business, then do a valuation on your business so you know its total worth. From there, you can then decide on the appropriate changes or not.

What is the Bureaucracy of Your Business?

A bureaucracy is important to a business because that means you have organized your business into departments to keep everything orderly. You would also have employees that are in charge of these departments to ensure everything runs smoothly.

The more departments and employees you have, the bigger the business. That means you don’t have a startup anymore.

Conclusion

There is a lot to be said about when a startup is no longer a startup, but a business. But the only thing that really matters is that your business is going.

Some places always call their company a startup because it keeps them in the mindset of creativity and innovation. If you want to call your startup a startup even though it has been going for decades? Go for it!

Titles don’t mean much if your business isn’t booming. Focus on the business and don’t worry about whether it is a startup or not. All that matters is that you are successful.

About The Author

Tristan Anderson

Hello! My name is Tristan Anderson and I live in Manhattan, Kansas. I enjoy being in nature and animals. I am also a huge geek who loves Star Wars and has a growing collection.

x