What is a startup, its characteristics and how it is financed

El startup term It has been incorporated into our personal dictionary in a very short time, with the same rapidity with which new technologies and digitalization have changed the vision and perception of things in all fields of life, including the way to create a company. , y donde las startups son un ejemplo, al unir tecnologia y emprendimiento.

La Real Academia defines the startup concept in a very simple way: Empresa de recent creation y de base tecnologia.

Si acudimos a distinta fuentes contrastadas y expertas en la materia we would have similar definitions or descriptions although more developed.

Unanimidad sobre qué es startup

Un ejemplo de ello, es cómo lo define la Chamber of Commerce of Spainwhich affirms that it is a company of new creation or early age that presents great possibilities of growth and commercialize products and services through the use of information and communication technologies.

Por su parte, el Banco Santander describe a startup as a company of new creation that, thanks to its scalable business model and the use of new technologies, has grandes possibilites de crecimiento.

In the same line, it describes BBVA, pointing out that a startup is an emerging company, normally with a high technological component, with grandes possibilites de crecimiento and that, in general, it supports an innovative idea that stands out from the general line of the market.

Las grandes tecnologias

The term startup nos llegó en grand medira fruit of the success of new technological companies, es decir, hablamos de Google, Apple, Facebook or Amazoncompañías que empezaron como startups, y que gracias al éxito que fueron alcanzando se convirtieron en las grandes empresas que ahora son.

Y es que una de las questiones que define a las startups es que mientras “una usual empresa puede tener.” an ambitious objective to grow by 10% annuallyuna startup suele pretender multiplicar su negocio entre tres y cinco veces al año”, como señala la Escuela de Negocios de la Innovación y los Emprendedores (IEBS).

Characteristics of a startup

To be considered as a startup, the company must have a series of characteristics, such as scalability, technology, a global focus, youth and a low initial cost.

These characteristics can be expanded or reduced depending on the source, but the ones mentioned above are the most common.

• Scalability: se trata de empresas que buscan aumentar su tamaño y sus ingresoes en poco tiempo, además de incrementar su producción y ventas sin necessidad de aumentar sus expenses. For their part, SMEs have more traditional visions and are in the market with the goal of achieving a more linear trajectory.
• Technology and innovation: son empresas que Nacen y se basan en ideas innovativas to satisfy a new need in the market. They rely on digital technologies to evolve, while SMEs can count on the latest technologies, but they do not base their business model on innovation.
• Enfoque global: The objective of a startup is grow and expand rapidly, but with a more comprehensive and global approachin front of the SMEs that have as objective a local or national market.
• Juventud: son emerging companies, which are in the first stages of brand management, sales and hiring of employees. They do not have a previous position.
• Reduced initial cost: Las startups nacen con la premise de costes bajos de producción para crecers más rapides y así aumentar su margen de beneficios. De hecho se inician con escaso personal, y sin sede propia, muchas comizan en oficinas compartidas (coworking).

Financing of a startup

The financing of a startup could be included within the characteristics described before, but its peculiarities and its different sources make it necessary to separate it, because a diferencia de las pymes, las startups prioritize en grand medida la inversión de capital externos.

Las dos fuentes de ingresos principales at the beginning are via the capital contributed by the founders (Bootstrapping) y el equity-fundingque no es otra cosa que dar participaciones o acciones de la empresa a un inversor a cambio de dinero.

Ese inversor puede llegar de muy diferentes formas, como pueden ser: FFF (Family, friends and fools), venture capital, seed capital, business angels, crowdfunding, public subsidies or con el apoyo de una incubadora.

• FFF (Family, friends and fools): se refere a people around the entrepreneur que aportan un capital reducido para apoyar cuando el proyecto está giving its first steps, y resulta pronto para dispon de la confianza de un inversor externo.
• Capital semilla: This economic contribution is realized in an initial phase of the company, más por el potencial de la idea y el equipo que la lleva a caboque por los resultados.
• Crowdfunding: consiste en obtener la financing through a collective or group of people, via the Internet. Within this financing mechanism, there are two types, as they grant a type of interest for the capital received (lending) o offerer a cambio acciones o participaciones de la empresa (equity).
• Business Angels: Estos ángeles de los negocios, son persons specialized in startups, who decide to opt for certain projectswith a personal economic investment.
• Subvenciones públicas: Existen diferentes opciones para conseguir public investmentya sea a nivel Estado o Comunidades Autónomas, para las startups.
• Incubadoras or accelerators: Se dedican a ayudar a acelerar el crecimiento de la startuplo que da una major possibility de éxito, al estar tuteladas por expertos, y que luego pueden participar en la financiación del proyecto.
• Venture capital: Se refere al concepto de capital risk, y que tiene lugar con la startup ya avanzada en su proposal. Son aportados por specialized investment funds and in greater quantities than other financing types. It is usual that this financing is divided in different rounds.

Ley de Startups

Last December, the Council of Ministers approved the project Ley de fomento del ecosistema de las emperezas emergentesmás conocido como Ley de Startupsque ahora se encuentra en tramitación parlamentaria, paso previo para su definitive approval, que se espera que pueda llegar antes de end de año.

En este texto legal se incluen medidas fiscalesse eliminan trabas burocráticas y see flexibilizan trámites to promote creation and investment in startups. They also include medidas para Attract and recover international and national talentfavoring the establishment in Spain of teletrabajadores and “digital nomads”.

In the text of the law project, a startup is defined as an enterprise nueva creación or de menos de 5 años7 years in the case of companies of biotechnology, energy, industrial and other strategic sectors or that have developed their own technology designed entirely in Spain, independent of other companies, that no coticen en un mercado de valores, no distribuyan ni haya distribuido beneficios, tengan caracter innovator and have an annual business volume of up to 5 million euros.

Apuesta de Telefónica

The Telefónica company is an example of the support that is given from a large company to incipient projects, like startups. For this, the technology has different instruments to support startups.

De ahí surge Wayra, un hub de open innovationcuya razón de ser es Invest in mature and technological startups that bring innovation a Telefónica ya su red de clientes.

Wayra está presente en siete hubs en Europatwo of them in Spain (Madrid and Barcelona) while en Latinoamérica realiza operaciones en los ecosistemas emprêndores de diez países.

Tan only a handful of data to show the potential of Wayra is that during the year 2021 he made investments for a total import of 6.7 million euros in 49 startups from Europe and Latin America, y en España cerró el año de su decimo aniversario con A total investment of 2.7 million euros in 19 startupsun 50% more than the 1.8 million euros invested in 2020 from the hubs of Madrid and Barcelona.

Precisamente en sus primeros 10 años, Wayra invested in 800 startups that contributed to boost the creation of more than 10,000 jobs of high qualification. Además, invirtió in this decade 50 million de euros, inversió que se revalorizó en más de un 70% (TVPI 1.71x), a lo que hay que addrador -according to data from the company, 75 successful sales (exits) from the portfolio de Wayra lo que ha permitido recuperar una buena parte de lo invertido.

Telefónica Ventures

Another figure that emerges from Telefónica in support of entrepreneurs is Telefónica Ventures, which invests directly in startups or through a network of venture capital funds, leaders in key markets, for build strategic partners totally aligned with the strategy of Telefónica.

Se trata de un “ecosistema abierto“Que impulsa el negocio de la compañía a nivel mundial, pero con presencia locale.”

Technology and digitalization are giving a revolution to the world we knew in the last century The birth of the startup concept is not another thing than the creation of this new ecosystem in the business worldwhere innovation, technology and entrepreneurship are united in a single term.