A few weeks ago, we looked at what a startup is, its characteristics, and how it differs from SMEs. 

In this post, we’ll discuss the different types of startups.

1. Scalable: are arguably the most popular type among these businesses. They are characterized by having an idea that can be developed at low cost and replicated in various contexts. These startups are generally in the tech sector, since with modest resources they can reach a global audience and offer the same service everywhere.
2. Social startups: While all startups aim to scale and grow in the global market, the reality is that many of these companies are not focused on generating large profits, but rather on offering a quality service or product to as many consumers as possible. These startups are distinguished by their focus on the scalability of a business model without prioritizing high profits, even though the venture must be profitable and generate the resources necessary for its survival and scalability. These types of startups exemplify how to do business with a focus on social responsibility. 
3. Startups for Sale: Many ideas emerge with the goal of becoming a real project, and generally, it is the business founders who hope to live the dream of owning a company and generating profits from it. However, there are some entrepreneurs whose sole purpose is to generate business ideas to be sold to others. Buyable startups are business projects that aim to be attractive to a larger buyer or that prove to be profitable enough to convince someone to acquire them and integrate them into their organization.
4. Primary startups: In contrast to investable startups, primary startups can be defined as those that arise from an interest on the part of the developer, entrepreneurs, and investors as a life project. These companies do not seek to be acquired by other companies, but rather to establish themselves in the market and develop their own identity. These startups are also known as passion-driven or lifestyle startups. This is because they arise from an emotional interest or the search for a solution to an everyday problem. This passion transforms into a business idea that can be useful to thousands or millions of people.
5. Secondary startups: A third type of startup, defined by who creates it and its purpose, is the side startup. These business units are characterized by not being a company’s main project, but rather serving as idea labs. Some developers work on them or even compete to create innovative platforms, solutions, or software that can receive capital injections if they prove their utility. Large companies constantly fund this type of startup with the aim of adopting their solutions as soon as their profitability becomes evident. Therefore, they do not arise from an interest on the part of their creators, but rather as a service to other entrepreneurs.

More and more entrepreneurs are joining the startup ecosystem, where the focus is on innovation, and we can also find startups dedicated to a wide variety of fields, always with the technological component that defines them. 

For more than three years,at Fynsa AGF, we have met with more than 80 Latin American startups, with whom we have developed various financing strategies through debt financing for asset purchases. 

If you'd like to learn more about these options, please email us at [email protected] 

Fynsa Private Debt Team