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What are the stages of start-ups?

According to the experts there are several stages which every startup goes through.

kokou adzo

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It’s useful to know these when first getting started. They will give you something to aim for, and help your team know if you’re still on track. The stages from deciding to found a start-up to making millions can be broken down into dozens of steps. That being said, in reality, there are only two major ones which you need to know about.

These are the two biggest stages and are really all you need to get your start-up going :

Creating and developing your product or service.

Before you can be successful you have to come up with a great product or service.

At this stage, you might have what you think is a great idea. But more than likely there will still be kinks which need to be ironed out and worked on. The way to do this is to study your market and investigate if your product or service is actually viable.

A great way to do this is with customer interviews or market research questionnaires and data.

Also, ask yourself the following questions.

  • Who is your ideal buyer?
  • What competing products are in this market?
  • How is your product different to what is available?
  • What features and benefits does your products have?
  • What problems or solutions does this product or service actually solve?

Knowing the answers to these questions will speed up the development of your product. It will also increase the likelihood that your product is successful when it comes to market, and also that it actually fits the market.

Getting funding for your start-up.

As I’m sure you know start-up funding works in, “Rounds.”

A round is basically a series of points at which you get money from investors. If you manage to successfully use these investments you will move onto the next round and get more money.

But before all this can happen you will need seed capital. This is the money that you manage to get before anyone invests in your business. It usually comes from the start-up founders savings. But can also come from friends family. Other sources of seed capital can come from bank loans, selling stock in your company and even credit cards.

After the seed capital stage the next phase is Angel Investors. These are people who will invest money into a business almost as if it’s a charity. They will give money to struggling business and to those who are extremely risky. This initial funding can also come from friends, start-up incubators and even Venture Capital companies which focus on new start-ups.

This first round of funding is usually known as the seed round and will amount to between $500K and $1.5M

Once you’ve made your way through this round you will then move onto series A,B, C, D and E funding. During all of these phases your start-up will continue to grow. The factor which determines if you’re going to move to the next round of funding is if your start-up grows between each round.

At every round, your start-up needs to grow, increase revenue, employ new staff members and get bigger. Basically, you need to be able to show your investors that something has happened whether that’s achieving goals, reaching certain KPI’s, increasing users, revenue or views.

Once you’ve been through all the stages of funding it’s time to launch an IPO. This is basically the point where you company lists on the stock exchange and you begin to fund yourself by selling stock.

 

Kokou Adzo is the editor and author of Startup.info. He is passionate about business and tech, and brings you the latest Startup news and information. He graduated from university of Siena (Italy) and Rennes (France) in Communications and Political Science with a Master's Degree. He manages the editorial operations at Startup.info.

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