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The earliest stage of a new business venture.

Start-Up Company

A company in its earliest stage of development, usually before its IPO. Start-up companies concentrate on product development and build-up of capitalization. Nearly all start-up companies operate at a loss, at least at first. Some start-ups go through a period where they have no revenue at all. Start-ups spend their time perfecting their business plans and developing products that will eventually be sold on the open market. Most start-ups rely on venture capital or loans to continue operations during this phase. See also: Payout period, Dot-com bubble.


While any new company could be considered a start-up, the description is usually applied to aggressive young companies that are actively courting private financing from venture capitalists, including wealthy individuals and private equity partnerships. In many cases, the start-ups plan to use the cash infusion to prepare for an initial public offering (IPO).

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