What Is A Startup? Explanation And Examples

Definition

According to the Cambridge English Dictionary, a startup is ‘a recently established small business’. But not exactly.

Difference between startups and small businesses

A startup focuses on rapid exponential growth in a specific market (you may have lately heard a lot of talks about different AI startups) with great amounts of funding whereas a small business has a more steady profitability within a more local sector. A small business usually has lesser profits, but also lesser investments and therefore, lesser probabilities of failure.

What makes a good startup

In a college seminar at the University of Waterloo, Sam Altman, founder of OpenAI, said ‘wait to have a good idea before you start a startup’. Moreover, he highlighted the importance of original thinking and not copying others, as it is only the innovative ideas that have chances of succeeding. 

In addition, focus drives passion. Working on one idea will take you to many more places than trying to do many projects all at once to see which one is actually going to work.

How to get funding

You have many options: bootstrapping, which is funding your startup with your own personal savings, or entering competitions. The advantage of bootstrapping is that it’s all yours, so whether it’s successful or not, only you are affected by it. However, it is important to note that the startup grows at a slower pace. 

As well as that, you can ask your friends and family to invest. If they are not keen or don’t have enough money, you can also reach out and pitch your idea to angel investors. These intend to provide early-stage financial support with their own personal money.

Last but not least, you can pitch your startup idea to a venture capital, who will agree to fund it in exchange for an ownership stake. This is specifically for very ambitious startups that are entering huge, popular markets.

It really depends on the type of person that you are and the kind of startup you want to grow.

Why are they so hard 

Because the reward is greater, so is the risk. If successful, a startup has a higher ROI than any small business, but that also calls for greater funding, and it takes more time to break even and start generating profits.

In fact, 90 percent of high-growth venture-backed (receive financial investment in exchange for equity or ownership stake) startups eventually fail within the first five years. 

Some popular startup success stories include: Anthropic, SpaceX and OpenAI.

However, as examples, and to get the bigger picture, we will showcase other less popular—yet exemplar—startups.

The Browser Company

The Browser Company, a software startup that designs innovative web browsers with AI integration, was acquired by Dia in September 2025 for 610 million dollars, even though it started with only 50 million dollars funding in early 2024.

Buildspace

Buildspace was an online accelerator that helped people launch their side projects, from YouTube channels to novels and software apps. However, the word ‘was’ in past tense is used because the founder, Majeed, decided to close it down for a personal reason.

NewLimit

This South San Francisco-based startup is not like the others: it uses scientific and medical discoveries to expand the healthspan of thousands of people. With a 3.6 billion dollar valuation, their AI system, Ambrosia, ‘designs payloads to make cells look and act young’.