I can start a business without an investment round, but not a startup? Is it a startup if it involves tech, a business if not? What if they use SOME tech, but not necessarily innovative tech? Or is this one of those 'you know it when you see it' kind of things? Has the term startup become a buzzword like "optimize" or "synergy"?
Seriously asking, not being snarky.
edit: thank you, for the responses that clarifiesthe distinction
Some of the causes and effects:
1. New business may have a proven business model, customers, product, market. Startup may have to find or create any of those
2. New business may have some capital to build/invest itself (I've worked in a restaurant, saved up, now opening my own). Startup is based on idea/people/work, but likely has no internal capital
3. Both have risk; but in some ways New business risk is known & understood. Startup's risk may be as undefined as their product/market.
As frequently used, there's also a
4. Expectation of profit / failure rate. A new business would be happy to succeed with small profits, certainly very much over bankruptcy/shutdown. Startup ecosystem/expectations are built around fail or succeed wildly.
The answer around me seems to be that a startup comes out of an idea without the capital worked out. That the equity they have to offer is worth nothing, unless they execute the plan with money they don't have.
If you have the capital worked out, you can go ahead into the business phase of the process right away, where profitability is king and there's no plan needed to answer the "how to raise more?" question.
A lot of what we associate with startups is the justifications towards raising and a lot of what we see from a "business" is geared towards margins.
For instance, better margins by extracting more profits on a lower revenue is better for one, but looks bad for the other.
A startup is an organisation in search of a scalable, profitable and repeatable business model.
(Scalable is relative but at minimum exponential. Linear growth does not a startup make.)
The above definition has helped me delineate between a tech smb and what one feels is a “startup”.
Most small businesses do not plan to grow very quickly.
Startup incubators would rather have their 999 startups go broke and the 1000th become "next Google" than have average RoI on all 1000.