For many, the startup, young sprout if we use the French expression, is the business model to develop. But what does the management of a startup actually mean, and does this operation apply to any project?
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Staying a startup is not a good sign
If you translate the term “start-up” into one of the famous online tools, you get “start-up” or “start-up”. Combined, the translation is “start”. In the economic field, this common word of the English language was essential in the late 90s, a few years before the explosion of the internet bubble.
Online services were in full development, and companies linked to a website were also called in the English-speaking world “dot com” or “dot com”, with reference to the domain name of their websites. The biotechnology sector was also very creator of start-up companies. The purpose of the creators of these startups was to promise investors very strong growth until the IPO.
Today, startups are still characterized by innovative nature of the product or service offers. And the range of activity sectors has expanded to other areas such as health, home automation, legal services, finance, transport. There are still more services, but technical innovation and new consumer habits have enabled innovative products to develop.
Before reaching this point, being an innovative company, in a market still being defined, the startup is characterized by a moving organization, significant investments in R&D, and losses sometimes important during several exercises. For investors who return to the capital, it is therefore a risky business. The Uber company is exemplary: created in 2009, it is still not profitable in 2016 and continues to generate colossal losses …
The fundamentals of the startup
The foundations of the startup often rest on one or two people who bring technology and innovation capacity. Steve Blank, entrepreneur and author of a reference book on the subject explains that the startup is an organization that seeks to develop a stable activity. The startup makes it possible to test and adjust the project in order to achieve a viable business. Startups therefore change models several times before stabilizing or disappearing.
When starting his startup, the creator has:
- of a concept with several characteristics;
- hypotheses for its business model.
The project begins with reduced staff, and a small circle of investors. If the project shows its growth potential, the staff and the financial needs can quickly grow. To finance this development, business angels, venture capital companies and investment funds are in this case very often a stakeholder in the share capital.
The status of SAS to create a startup
For several years, statistics from the registries and INSEE have shown strong growth in simplified share companies (SASU single-share simplified share company / SAS simplified share company) among business start-ups.
This is particularly the case for one-person projects, the status of one-person limited liability company (EURL) has been exceeded by its SASU equivalent. As for multi-person projects: the number of companies created in the SAS form is still lower than that of SARLs. But while the number of LLCs created decreased by 14% from 2014 to 2015, that of SAS increased by 18%. The development is striking: between 2000 and 2015, the number of companies registered in SAS increased by almost 10 to reach 36,389 units in 2015.
To respond to the rapid development of a project, to personalize the operation of the company, the statutes of SASU / SA offer freedom appreciated by the creators / founders. It is possible to provide for specific provisions for the company to facilitate its development: conditions of entry into the capital, approval or not of the shareholders, majority for certain decisions, power of the directors, conditions of exit from the capital …
The law of modernization of the economy simplified the creation of SAS companies:
- minimum free capital (37,000 euros previously);
- leader at employee tax and social security system.
Compared to the LLC, the drafting of the statutes of a SAS is more technical. It is strongly advised to consult a lawyer or have one on your team to verify that the statutes are not too complicated and that they will be applicable without too many procedures.
Finally, any company can be called a startup as long as it is in the process of defining its economic model. The term remains despite everything mainly applicable to innovative companies and whose management cultivates a flexible organization. But creating a startup is overtaken by the new grail: integrating the list of “unicorns” (around 140 companies worldwide in October 2016). But you still have to go through “startup mode” a few years before!
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