What is a start-up (2024)

A start-up is a business in the earliest stages of getting established. Companies may stay in start-up mode for as long as three years.

Start-ups take many forms. They may:

• Be sole proprietorships, general partnerships, limited partnerships or corporations
• Sell an established product or service, or a new product or service
• Sell to an established market or a new one
• Operate domestically or internationally
• Meet new market needs
• Answer an existing market need created by the departure of a company that previously met that need
• Arise in any industry, existing or new
• Be launched by someone with or without prior business experience
• Be fully funded or require investor funding

If a first-time entrepreneur buys an existing business, the business is not considered a start-up.

More about start-ups

Canada produces the same number of start-ups annually as other countries with similar success rates. However, fewer Canadian start-ups grow into “mid-market companies,” that is, larger, more mature businesses. This is mainly because Canadian entrepreneurs often sell their start-ups to foreign investors, who then take on the risk associated with growing to a mid-market size and beyond.

Related definitions

Find out more in our glossary