What is a Startup and When Does a Startup Stop Being a Startup?

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what is a startup

India has gone on to become the third-largest startup hub in the world and startups are playing an important role in making Indian cities live up to the standards of Silicon Valley. But and ? This depends on various factors.

What constitutes a startup?

According to the Ministry of Commerce and Industry, an entity that is registered as a private limited company as defined in the Companies Act, 2013 or registered as a partnership firm under section 59 of the partnership act, 1932 of a limited liability company under the LLP Act of 2008 in India is called a startup if:

Its period of existence from the date of incorporation is less than 10 years,

Its annual turnover does not exceed Rs 100 crore in a financial year.

It is working towards innovation, development, improvement of products or processes or services.

Or, if it is a scalable business model with a high potential for employment generation or wealth creation.

But should the number of years a startup has been around be a deciding factor, or should it based on growth and profitability?

Some factors that decide when a startup has leaped.

In technical terms, a startup stops being a startup as soon as it crosses 100 crores turnover or ten years of incorporation.

You enter in the corporate culture when your team grows to 50-100 people.

An entity struggling with its business model continues to remain a startup until it decides on a business model they want for the long term.

Once a company has raised angel or seed funding and done two rounds of large venture capital or private equity investment, it is not a startup anymore because it has found its business model and is just expanding. These companies are in growth mode, not startups.

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