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Business formation for startups depends on the founder’s vision

On Behalf of | Feb 18, 2019 | Business Formation

In Oregon and elsewhere, a startup business is a special kind of new business enterprise that is usually marked by certain characteristics. It usually involves a venture that is technology-related and that has an exceptionally high growth expectation. It is usually based on a dream concept that is unique to its target industry and that may even intend to revolutionize the way that industry operates in some vital way or another. With respect to the legalities of business formation, a startup may be structured like any other beginning enterprise, but its founders will generally want to have a legal plan of action to establish legal structures that will someday accommodate capital growth through public offerings.

Startups may be funded by angel investors, venture capital firms and online investor vehicles. The proliferation of startup incubators and accelerators throughout the country is a positive for startups. These training sites for new business projects will fund and guide their chosen best companies through to higher levels of operation. These funding and growth stimulating mechanisms have had great success in giving a strong start to many successful startup ventures.

A startup is thus a more risk-oriented undertaking than a traditional closed-concept new business. The traditional model does not intend to necessarily expand beyond its current ownership whereas the high-growth startup intends to grow beyond the original founders and to expand its operations both internally and geographically. The drawback to the startup philosophy is that its risk-oriented spirit generally means a higher rate of failure and closures than the traditional small business.

Of course, when the startup hits its target and does click in its industry or with the public, the return can be exponential, providing nearly unending additional opportunities. In Oregon and elsewhere, whether one engages in a traditional model for a new business or a fast-growth startup, there are considerations of business formation that must be put in place. Approvals, licenses, permits and the like may be required; in addition, legal filings must be made to establish an initial legal structure for the business.