A startup is a young, fast-growing company based on an innovative business idea and technology. It is believed that the term “startup” appeared in 1939, when Stanford graduates founded the Hewlett-Packard company, calling it a startup; it subsequently became a major supplier of hardware and software. The term began to be used in Forbes and Business Week magazines in the 1970s and finally took hold in the 1990s during the dot-com boom.
Signs of a startup
There are different opinions about what constitutes a startup’s essence; the definitions vary. The hallmarks of a startup include:
- Age: it is a young or just emerging company with a short history of presence in the market.
- Growth: startups are focused on rapid development and scaling of the business model, as well as capturing market share, rather than quick payback.
- Innovation: startups offer unique solutions based on new technologies.
- Frugality: startups try to operate with minimal resources and attract third-party investments in the process.
- Venture-backed: The classic characteristic of a startup is to attract investments from venture capital investors who risk their capital. Other Investments don’t make a small business a startup.
- Uncertainty: this is a business with high risks for the investor; it is difficult to predict whether the project will become a unicorn or fail miserably.
- Unprofitability: startups, as a rule, always invest in growth more than they earn at the moment since investors are counting on earnings in the future when the business reaches a certain scale.
- Culture: startups are distinguished by team cohesion, passion for the idea of the project, freedom of expression, and willingness to work upfront and overtime for the sake of experience and future achievements.
Examples of well-known startup companies are Instagram, Twitter, Facebook, Uber, Airbnb, SpaceX, and Snapchat.
Why do startups need virtual data rooms?
As you may have noticed, startups are always based on innovative ideas. Now every interesting thought is worth its weight in gold. So, it is not surprising that some not entirely honest people try to steal other people’s ideas.
This is the first reason why startups need virtual data rooms – it is reliable protection against hacks and data loss. Interestingly, the virtual space protects not only from external intrusions but also from insider information loss. For example, suppose your company employs several dozen people and they are bound by corporate secrets. In that case, a virtual room will help protect your information from being stolen by your employees.
Also, the virtual room is a convenient and secure working environment that supports almost any integration and has many interesting additional features inside—for example, analytics tools.
VDR is not as expensive as many people think. Such a service can cost as little as $100-200 per month for a small business. At the same time, it will cover your company’s needs. If necessary, you can always change your tariff plan in favor of one with more features needed for your growing business.