The following is a list of common attributes associated with a startup company.

  1. A startup company is a company with a limited operating history.
  2. It may effectively cease to be a startup as it passes various milestones, such as becoming profitable, or becoming publically traded in an IPO, or ceasing to exist as an independent entity via a merger or acquisition.
  3. Most startups fail.
  4. Startups are distinguished by their risk/reward profile and scalability.
  5. Compared to established businesses, startups must have lower bootstrapping costs, higher risk, and higher potential return on investment, since their cost of capital is high.
  6. Successful startups are typically more scalable than an established business, in the sense that they can potentially grow rapidly with limited investment of capital,labor or land.
  7. Venture capital firms and angel investors may help startup companies begin operations, exchanging cash for an equity stake.
  8. Financing may also be in the form of a loan, often cast as a convertible bond or warrant.
  9. In practice, many startups begin modestly funded in a "friends and family" round of investment, or simply self-funded by the founders.