Is Your Company A Startup Or A Small Business?

People generally use the term “startup” to make two comparisons. The first being the amount of time the business has been in existence, typically when it’s less than two years old. The second instance is when they’re referring to a specific type of business model — often, those that disrupt an existing large market with a new type of business model.

Startups test and adapt their business model as they go.  Therefore, they don’t often have a timeline to being cash flow positive until they optimize and define their business model. In comparison, a small business uses an established business, or revenue, model. The founders might need some investment capital to get started, but the path and timeline to cashflow positive is well defined because it has been done before.

How your company is defined will affect how you should approach your investor pitch presentation. Learn more about identifying and defining your type of business by watching this 3 minute video:

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