Founded by one or a few entrepreneurs, startup companies are still in their infant business stage. They aim to fill in demand on the market with their unique product or service.

These businesses seek to revolutionize whole industries and change their field of interest. Their founders are often ambitious, striving to create something truly unprecedented. When they succeed, such companies then gain a high valuation. Following an IPO, they can earn an exorbitant sum of money.

Startups usually don’t follow established business patterns. In the beginning, they get most of their funds from the founders. Thus, they don’t have enough money to take their business to the next level.

To gain this capital, they reach out to venture capitalists or angel investors. Some might ask their friends and family for help too.

The greatest den of venture capitalists lies in Silicon Valley. Many startups turn to them to gain potential investors. However, it’s not an easy tank.

These companies can then reinvest this money in research and business plan development. Through market research, they can find out if their product will do well.

A business plan helps them set a clear goal and defines the management and marketing strategy.

While startups have a higher risk of failure than other companies, it can be very rewarding to work at them. They come with many benefits and promote innovation and learning.

The success of startups depends on the early years. At this time, these companies have to raise as much money as possible. At the same time, they have to come up with a functional business model.

In this article, we’re going to examine every aspect of working at a startup. By the end, you’ll have enough information to decide if this is something you’ll like to do or not.

Startup vs regular company – 2 key differences

Approach

The purpose of every company is to create and promote a product. A product that will earn them money. However, a startup achieves this in a different way.

While regular companies follow established business models, startups strive to create new ones.

Growth rate

Startups have to expand upon their ideas fast. To achieve these, they constantly evaluate their products. They do so by analyzing feedback and usage data.

This helps them improve their products at a much steadier pace.

Industries with many startups

  • Software
  • Technology
  • Marketing
  • Advertising
  • Education
  • IT
  • Insurance
  • Real estate
  • Energy
  • Retail
  • E-commerce
  • Cryptocurrency
  • Blockchain

7 different startup types

Scalable startup companies

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These types of companies seek to amass as much capital as possible. Most of them are tech companies because technology is always in demand.

Some of the most prominent examples are Google, Facebook, Twitter, and Uber. These companies focus on hiring the most skilled workers. They also reach out to many investors to facilitate their development.

Many successful apples are scalable startups. Once they research their desired market, they generate buzz among consumers. When they gain a loyal user base, further expansion becomes much easier.

Scalable startups gain their capital from investors such as venture capitalists or business partners. Once they grow big enough, some interested parties might want to buy them out.

Small and medium enterprise startup companies

This type of startup is the opposite of the scalable one. These small businesses aim to survive for as long as possible.

People who create these startups are often commoners. They handle the funding themselves. This means they don’t need to rely on investors to take the business off the ground. They can also bide their time before scaling up.

Some good examples include hairdressers, bakers, and grocery stores.

One person or a small team usually leads this type of startup. Most of them are just happy to have their own company and don’t seek to expand.

Lifestyle startup companies

Most lifestyle startups begin as hobbies. Many influencers and YouTubers are lifestyle startups. Some Twitch streamers can fall into this category as well.

Since they combine business and pleasure, these startups are growing in popularity. The income is not small either.

Social media contributed to the growth of this kind of startup. With enough followers, anyone can start their own lifestyle startup.

Buyable startup companies

These startups usually deal with the technology and software field. They aim to build from nothing and then sell the whole startup to a larger company. Amazon and Uber are some of the most famous buyers of such startups.

People who like to develop new ideas often go for buyable startups. Often called serial entrepreneurs, they are good at creating innovative designs and approaches. However, they find operating the business too monotonous.

Big business startup companies

The market is always flowing and changing. Thus, large companies must be very malleable in their approach to succeed.

Their goal is to keep designing novel products to keep up with changing times.

Social startup companies

Social startups don’t care much for profit. Instead, they seek to help other people. They include mostly charities and nonprofits.

They scale only so they can provide their charitable services. While they function similarly to regular startups, they get their funds from grants and donors.

An example would be Signal.

Offshoot startups

True to their name, these startups branch off from a parent company. In time, they become independent. They generally rely on investments from their parent company and it’s rare for them to seek funds elsewhere.

Only large established companies can afford this type of startup. It allows them to test out a new market and see how they’d do against rival companies. The main benefit is that they don’t jeopardize their existing customer base.

Since the new companies are independent, they have much more freedom in their decisions. This allows them to test out new strategies without damaging their parent brand.

11 benefits of working at a startup

Greater learning curve

Most startups can’t afford to employ many people. Instead, they delegate multiple responsibilities to what few workers they have.

Though a challenge, it can also be a good opportunity to develop your skills.

As the company grows, you learn more and more. If you decided to leave your job one day, this knowledge might give you an edge in your new one.

The tasks aren’t monotonous

Working at a startup doesn’t have a rigid job description. Although the work may be hard, it will never be boring.

You’ll have to adapt to a lot of new situations. In the process, you’ll learn new skills. These will come in handy later in your professional career.

Better time management

You can often work flexible hours at a startup. Some of these companies also offer the option to work from home.

This can help you balance out your private and professional life. It also means you don’t need to wake up early.

Superior workplace

thebridge by Ascendas-Singbridge in Singapore

The workplace at a startup is anything but rigid. The atmosphere tends to be very friendly and relaxed.

Expect a lot of benefits too. These include nurseries and free food.

New ideas are heard

Creativity always pays off in a startup. Since the goal is to grow as fast as possible, every idea matters.

Your innovative approach could also lead to a promotion.

Inimitable experience

Startups are much different from regular companies. You’d have to experience it yourself to fully understand.

Some of them have nap rooms where you can doze off for a bit. Others offer the employees daily catered lunches.

Good for professional growth

Though a startup likely won’t pay you more than a large company, it helps you grow professionally. During your time with it, you’ll acquire a lot of incentives and skills.

This can pave the way for new future career opportunities.

More personable workplace

Startups don’t have many employees.

This creates a very tight-knit community. If you love working in a friendly environment, startups are made just for you.

Startups are more efficient

Startups tend to be much more efficient and cost-effective. Since they know their limitations, they focus on their strengths instead.

Working at a startup is more satisfying

When you work at a startup, you’ll feel as if you’re directly contributing to the growth of the company. This often leads to higher job satisfaction.

And while these companies have very few employees, the leaders pay special attention to their well-being. This makes them much happier than workers in regular companies.

Little to no supervision

Startup employees often get to make their own decision. This is because the supervision isn’t as strict. With so few employees, it just doesn’t need to be.

9 drawbacks of working at a startup

Riskier than other companies

Working at an early-stage startup can be very risky. Before the company makes any profit, it must establish itself in the market. Many startups crumble before this happens.

That doesn’t mean every startup is bound to fail. But the risk is certainly higher.

Working at a startup can be stressful

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Starting a business can be a very rigorous process. The beginnings can be especially challenging. The heaps of work can increase your stress levels. And to make matters even worse, you rarely get compensated for the harder work.

Expect a lot of responsibilities when working at a startup. If you don’t handle stress well, this type of job might not be for you.

Unstable future

A startup is one of the most fluid types of companies. This goes for their employees though. As its needs shift, so do your responsibilities.

At one point, you might be caving in beneath a pile of work. Later, you might find yourself having nothing to do.

Your pay also depends on the startup’s funds. When they raise, so does your paycheck. But they fall together as well.

Lower pay in the beginning

Startups often struggle to make ends meet, especially early on. This will reflect on your salary. Compared to established companies, it will always be lower.

Thankfully, this tends to improve as the startup grows.

Tough competition

While many people decide to build a startup, few of them succeed. That’s why the competition’s especially tough in the startup environment.

The directive tends to change often

Though startups are very innovative, this can sometimes work against you. Your role in the company will change often. Sometimes, even your entire goals might change.

Some people just aren’t cut out for such an ever-changing environment.

No firmly set hierarchy

While startups do have leaders, the work ethic is much more relaxed. Don’t expect the same rigid chain of command you could find in a regular company.

This can make handling certain issues confusing. Employees often don’t know who to turn to with their problems. Thus, the workplace might feel too chaotic at times.

Few rules

Working at a startup company can feel quite liberal at times. However, this freedom can be overwhelming.

If you like to hone a single skill or work on a single task, you might have to look elsewhere.

Fewer resources in the beginning

In the early stages, the startup won’t have many resources. This can halt your professional development, at least until the business takes off.

Is working at a startup the right choice for you?

Before you decide if you want to work at a startup or not, you have to weigh both the pros and cons.

Firstly, working at a startup can be quite uncertain. If the business goes under, you might end up unemployed. It might lead to another job hunt sooner than you’d expect. Is this a risk you’re willing to take?

Next, look at your potential responsibilities. While startups might offer flexible hours, the job is very demanding. Can you balance private and professional lives? Do you have a family you need to take care of? Can you handle the stressful work?

Examine your skills and personality too. Can you multitask effectively? Are you open to trying out new things? Or do you prefer a predictable job?

Consider the company itself too. It should be well-funded with a clearly set goal. Examine its future prospects too.

Look at the benefits too. Are they enough to compensate for the risky and demanding nature of the job? Will they stay constant in the future?

After asking these questions, your decision should be much easier.

Final thoughts on working at a startup

Startups can be very promising. However, they might struggle in countries with closed economies. In such conservative countries, it’s much harder to push new ideas.

Startups can be attractive for many reasons. They offer flexible hours and better job satisfaction. These companies also value innovative employees and help them grow professionally.

On the other hand, they always carry the risk of failure. Furthermore, they don’t pay as well as established companies. They might require more work which can make the job very stressful.

Whether working at a startup will be good for you or not depends on your personality. If you think the pros outweigh the cons, go for it. But if you don’t see yourself shouldering all those burdens, you might be better off working somewhere else.

If you liked this article about working at a startup, you should check out the best business YouTube channels, this article on startup culture, and the positions in a startup company

We also wrote about similar topics like the difference between startup vs small business, how it is startup quotes, and startup ideas for students.

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I'm the manager behind the Upcut Studio team. I've been involved in content marketing for quite a few years helping startups grow.