Category: Invest Money
Hits: 622

The real question is, Has the company started to grow up?

I think the real question is, Has the company started to grow up? The fastest way to figure this out is to take a look at the business focus.

A startup is on the quest to find product-market fit, developing and iterating its product or service, experimenting with customer segmentation and working toward a positive contribution margin.

A scaleup, on the other hand, has already validated its product in a market, and has proven that the unit economics are sustainable. A scaleups quest is to continue on that upward climb. Think of it this way: Startups invest money to learn, experiment and find validation, all on their quest to uncover a winning formula. Scaleups invest money and accelerate growth once they know that putting in $X will return $Y.

Ive learned from experience that the required skill set and focus of a companys leadership shifts dramatically between a companys startup and scaleup phases, and theres no way to move from one to the other without taking this shift into account. Here are a few key examples: