The Four Startup Stages

Whenever someone tells me that want to join a startup, I always ask about their preferred stage. Typically, they don’t have a context for the stage name jargon so I go through the common ones:

  • Idea Stage – An idea is in place. Maybe there’s a team, maybe it’s just a founder. There isn’t much here yet other than an idea and a dream.
  • Seed Stage – The prototype works. Usually a few customers or beta users that are trying things out. Likely some friends and family funding or lots of sweat equity.
  • Early Stage – Product/market fit is solid and there are paying customers. Revenue is in the mid six-figures to low single digit millions. Customer acquisition is working and repeatability is the focus.
  • Growth Stage – Things are humming along nicely with the overall business cranking. Revenue is at least $5M and often much higher. Scaling is the main focus and there’s a path to the next major milestone.

With each stage comes the typical pros and cons as well as a risk/reward trade off for potential new employees. When seeking a job at a startup, it’s important to understand the standard stages and think through what’s most appropriate.

What else? What are some more thoughts on the four startup stages?

One thought on “The Four Startup Stages

  1. David we had an interesting debate about focusing on “unit economics”. I understand the rationale with different scenarios but at what stage do you see smart startups start to focus on unit economics? How would your answer differ with a pure SaaS company vs. technology-enabled services company?

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