Startup Vs Entrepreneurship: Similarities and Differences

Last Updated on May 19, 2023

An entrepreneur aspires to independence. A startup founder desires to rule the entire planet. In the past three decades, the number of tech firms has exploded, making entrepreneurship a tremendously alluring career. Successful company founders are regarded as superstars and are unquestionably some of the most influential persons on the planet.

This inevitably attracts more individuals to the startup world, which has the bad side effect of attracting people who are not suitable for the adventure of company founders. To establish a business, you do not need to be an expert. In reality, it only takes a day for everyone to complete.

One of the most difficult things you can attempt is to turn a company into a scalable and impactful venture, so if you are not up for the journey and cannot appreciate the process, you can easily burn out.

However, it is possible to be an entrepreneur without being the founder of a startup. A startup founder and an entrepreneur both launch new businesses, but the key distinction is the nature of the business itself.

What is a Startup?

A startup, or start-up, is essentially a fledgling business with an innovative business plan. For instance, you would be a tech startup entrepreneur if you were to build a business strategy, secure finance, and develop a special piece of software that solves a significant problem.

Startup entrepreneurs frequently have an idea for a good-for-the-world product or service. In truth, addressing a need, want, or issue that millions of people globally share in exchange for financial recompense in the form of profit is the basis of the business.

Startup businesses, as opposed to big, unwieldy enterprises, are highly lean in their operations and may concentrate on quick growth right away. Startup owners may immediately build a team and begin resolving issues for their clients because there is no bureaucratic “red tape” to wade through in order to advance a project or bring an idea to fulfilment.

Read: What are the Top Funding Options for Startup Ventures?

What is Entrepreneurship?

An individual who starts a new firm, taking on the majority of the risks and reaping the majority of the gains, is known as an entrepreneur. Entrepreneurship is the practice of starting a business. The entrepreneur is frequently viewed as an innovator, a source of fresh concepts for products, services, businesses, and operational methods.

Entrepreneurs are essential to any economy because they have the knowledge and drive to foresee requirements and sell viable new ideas. Entrepreneurship that succeeds in assuming the risks involved in founding a firm is rewarded with money, notoriety, and chances for future growth. Failure in entrepreneurship leads to losses and diminished market presence for individuals engaged.

Similarities Between Startup and Entrepreneurship

The major similarity between a startup and a business is that they are both starting new ventures. They are both taking on risks and they both need funding. In a way, you can categorize them as both being branches of entrepreneurship. The differences between them, however, lie in how they go about creating the ventures, how much risk and funding is involved and the overall end goal for the venture being created.

Below, let us explore the differences between a startup and a traditional business.

Differences Between Startup and Entrepreneurship


Product or service innovation is one of the key distinctions between a startup and a business.

Small companies rarely assert their uniqueness. Many other businesses can be compared to small businesses. This is not to argue that small businesses don’t desire rapid and steady growth; many do but in different ways. Small enterprises will concentrate on generating consistent revenue while keeping costs low.

Innovating is the most crucial element for a startup. A startup’s objective is to develop a new product or enhance an existing one. Another crucial distinction between small enterprises and startups is this one. Businesses are designed for rapid and stable growth at every level of development in order to draw in new investors and finance sources.


The majority of the time, venture capital firms fund startups. Entrepreneurs must justify their growth forecasts and demonstrate how the requested investment would raise the startup’s value in order to secure funding. You must offer a business plan to venture capital firms that details how you will achieve this growth and how it will raise the startup’s worth.

Small businesses are not contacting huge venture investors, whose primary goal is to increase investment wealth, thus they don’t need to present high revenue projections. Small business loans from banks or other lenders thus make up the majority of their funding.

The risk factor

An inventive, scalable startup. Hopefully, these elements work together to make it disruptive. However, being disruptive is a difficult objective to achieve, thus a startup is unquestionably quite hazardous. The most likely scenario for you if you become a startup founder is that you’ll put in more effort than you ever have. You’ll ultimately fail.

Of course, starting a new business is quite risky, but it can be difficult to determine how much risk is actually involved.

Being the owner of a brand-new traditional firm is dangerous because you risk being outcompeted if your industry is not expanding and if your rivals are performing better than you or have more resources.

The same causes can cause you to fail as a business founder, but you also risk failing if the market doesn’t require what you’re creating in the first place. If you don’t test the actual market, you’ll never know if people want what you’re giving. Therefore, even if you follow all the instructions exactly, you will probably fail, and you will have to make several unsuccessful efforts before you succeed.

Conventional employment is minimal risk and gives low reward in comparison to creating a scalable business, according to the risk-reward scale. A small brick-and-mortar business operated through traditional entrepreneurship has a medium to high risk and a medium to high profit. Startup entrepreneurship is extremely risky, but the potential returns are also extreme.

The end game

Both startups and established enterprises may have scalable business models, but the two types of organisations often have very distinct life cycles.

Although profitability is the aim, a company’s principal objective is to continue operating. That could appear in a variety of ways. For instance, a grocery store in Lagos might want to eventually open stores all over Nigeria, whereas a hair salon might only want to create enough demand to allow it to eventually raise its prices.

Startups aren’t typically thought of as long-term enterprises. They come in with the intention of making a dramatic exit. They often have one of two escape routes. Either they develop into a business that is so enormously successful that it can have an initial public offering on the stock market, or they are acquired by a bigger business, in which case the startup founders receive millions or even billions of dollars.

Small business owners typically want to stay with their company until it fails or they retire, in contrast to startup founders who frequently chase new business ideas and switch between companies. Small firms frequently change ownership, so this isn’t to imply that they are never acquired or sold, but it’s not usually the intention.

Final Thoughts

Making the best decision simply depends on your individual values, interests, and priorities. Startups are your greatest option if your objective is to influence society and you are passionate about the company you want to create and the issues you want to address.

Traditional entrepreneurship may be a better option than innovative startups if you want to be your own boss and have a greater ceiling for what you can achieve in life, but at the same time, you don’t want to keep failing before you can be rewarded for your efforts.

Remember that not everyone in this world needs to be an entrepreneur-obsessed hustler and that there are numerous opportunities to move up the corporate ladder and make a real difference in your business, and even the globe, if work and stability are your top priorities in life.

Recognize that it’s acceptable to have realistic goals and your feet firmly planted in the ground. When you begin work on your new enterprise, keep in mind that the grandeur of startups has a price. There has never been a better time to be alive than now, provided you can accept the cost of failure and find meaning in the startup path despite all of the challenges.

Before you go…

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