Founding and operation of a startup is connected with subsequent stages. Distinguishing between them is very important because it allows you to match, among other things, financing strategies, which are different in different phases. It also allows you to set further goals and helps you stick to a schedule of planned work. Read the article till the end and find out what are the stages of a startup development.
Pre-seed stage
In the beginning, a good idea is needed. Then there is its first meeting with reality. If it turns out that the concept is related to a real problem and the hypothesis of creators how to solve it is interesting for someone (potential customers) it is already a great success. In this phase one usually works with family members, colleagues. As well as funding, which is usually done from your own funds and resources, family or colleagues (bootstrapping).
Stages of startup development – seed stage
At this stage you are already working on the first prototype of the final product, application or service. This is also a good time to look for a serious investor (e.g. business angel), who will finance e.g. further necessary research, implementation of other solutions. In addition, in this phase the organizational structure of the startup is created, along with the definition of shares and control in the venture. The risk of the venture at this stage is still high.
Stages of startup development – Early growth stage
The risk of failure at this stage is lower than at previous stages. The finished product, service or solution is present on the market and the startup begins to generate its first revenues. It also builds its increasingly strong position in the market. The startup still needs financing from external sources, because with low profitability it is not yet able to self-finance. Bank loans are starting to become more available, although they are still seen as an expensive source of financing.
Growth and expansion stage
The startup has a proven business model and has achieved market success with high profitability. The venture moves into the maturity phase and its existence as a startup ends. At this point comes the exit through sale to an industry investor or preparation for an IPO.
