A tech startup is a company founded with a business idea that relies on technology to innovate and impact the market. Some examples of these companies are Amazon, Zoom and even Google. These companies were once small startups with a unique idea. Tech startups are distinct from traditional businesses in that they experiment with different business models and prioritize growth (often at the expense of stability).
Unlike their larger, more established counterparts, tech startups do not have the baggage of existing processes, clients or teams. They can therefore work quickly and adapt more easily. This agility allows them to scale up at a faster rate. Additionally, they are often backed by venture capital or crowdfunding which allows them to obtain substantial funding.
The key to success for tech startups is innovating and solving real problems. It is also essential that they secure intellectual property protection to ensure their idea remains protected. According to the newsmagazine The Economist, as much as 75% of a startup’s value is based on its intellectual property.
Once these foundational elements are in place, a tech startup can focus on launching their product and growing their customer base. To achieve this, they need to have a solid business plan with clear goals and projections. Lastly, they need to set up the right legal structure to attract investors. The most common option is a limited liability corporation which offers flexibility at the early stages. Other options include a partnership or sole proprietorship.