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Start-up: General information

19 July 2021
BDB Network
What is a start-up: the main characteristics that distinguish it

Start-ups are a replicable and scalable business model that leads innovation and economic growth around the world, creating new types of products and services every year. This model is one of the most popular at global level.

There are four fundamental features that make a company a start-up:

  1. Scalability: is the ability of a start-up to grow exponentially by limiting resources.
  2. Replicability of the business model means that the business model of a start-up can be repeated at different geographical points and in different time periods without the need to make major changes.
  3. Innovation inherent (of process or product): start-ups create products and services in order to satisfy a need. They are born to upset or to create a market. In a nutshell, they are born to innovate.
  4. Temporariness: the start-up represents a first transitional phase of the business growth path that will possibly lead it to become a large company.

In conclusion, start-ups have been established for less than 5 years, they are not listed on a regulated market nor on MTF (Multilateral trading facility)

What differentiates a startup from the normal enterprise

Since we have defined what a start-up is, which is a temporary, deconstructed organization looking for a replicable, scalable business model, we can affirm that all those companies that do not fall within this definition cannot be considered start-up.

But what are they? They are simply SME (small and medium sized enterprises) that are part of the economic and productive fabric of a country such as a “lifestyle business” with which we can identify a company that creates value, fives work and boasts a series of regular clients.

The meaning of startups in the most important countries where they are most present

United States of America
The concept of start-up was born in the United States of America, precisely in Silicon Valley, always considered a land of opportunity.

The definition was coined by Steve Blank, one of the most influential entrepreneurs in Silicon Valley and the America technology industry: “Start Up is a temporary organization with the aim of seeking and finding a scalable and repeatable business model”.

In India, a start-up is a newly established activity, usually small, initiated by a person or group of individuals. What differentiates it from other new activities is that a start- up offers a new product or service that is not offered somewhere else in the same way.

The key word is innovation: the company develops a new product, service or retreats a current product, service into something better.

For Romania a startup is a business in the form of a company, partnership or temporary organization that aims to find a repeatable and scalable business model.

However, in order to maximize the success of the business, the differentiating element of the business must be identified and promoted. In the case of start-ups, business strategies are the result of the entrepreneur’s personal experience and managerial skills.

The 5 best European countries to choose to open a new headquarters

Today, it’s easier to create a new business location in Europe thanks to globalisation and the rise of digital technologies. But of all the European countries which are the best to choose? Well according to a recent report the best 5 are:

  1. Denmark: is one of the countries with the highest rate of entrepreneurship in the world, as well as the first country for the ease of cross-border trade. 
  2. Romania: the benefits relate to operating costs and overheads. Commercial property, energy and services are three to five times cheaper than in Western Europe. There are also advantages to tax incentives.
  3. Estonia: with the e-residence program, all Estonian citizens receive an electronic identity that allows them to access approximately 4,000 services. Furthermore, Estonia has the most competitive tax regime in the developed world.
  4. Sweden: in this country there is a very low rate to promote business activity. 
  5. Lithuania: the country is very coveted by the technology sector also for the presence of a very high number of young graduates specialized in IT.