What is a startup company? Explaining the difference from venture companies and domestic examples

The talent flowing into startups is no longer just young people. It is also becoming a career path choice for many business people, with an increasing number of cases in which people who have gained experience at large companies transfer to startup companies and contribute to the company’s growth.

What is the difference between major companies/venture companies and startup companies, and what are the benefits of working at a startup company? Let’s find out in this article.

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First, let’s consider what a “startup company” is. Currently, there is no clear definition, but if you look at the common points of companies that are talked about in the framework of “startup” in the world, you will see it. By the way, PayPal founder Peter Thiel describes startup companies as follows in his book “What can you create from zero to one?”

Making full use of technology and aiming to be a presence that brings innovation to society is certainly common to many start-up companies. But that’s not all.

Common characteristics of startup companies

Many startups raise funds from venture capital and individual investors within a few years of their founding. Venture capital is a business format that aims to invest in unlisted companies and obtain profits on the sale of shares after the stock is listed and profits on the sale of businesses to other companies.

Funding sources may be self-financed by venture capital, or fund (investment partnership) may be established and funded by investors. In the case of a fund, the operating period is set, and it is required to generate profits within the period and return it to the investors.

In this way, one of the major characteristics of startup companies is that they raise funds from venture capital in their early stages.

So, how do you define a venture company, which is often confused with a start-up company? Venture companies also do not have a clear definition, so let’s look for common denominators.

Looking at the origins of companies that are talked about in the framework of venture companies in Japan, we find that they are very different from current startup companies, such as by making full use of technology to bring about innovation, and by raising funds from venture capital and achieving rapid growth. there is no.

The difference between the two is ambiguous, and it can be assumed that they can be divided by the time of establishment. The word “startup” itself was generally used in the United States, but it has gradually started to spread in Japan since around 2010. Before the word startup became popular, they were called venture companies.

On the other hand, this classification is also ambiguous, but it is sometimes used depending on the years of establishment and the size of the company. A company that has grown to a certain size after being established for a certain number of years is sometimes called a venture.  

While there are many differences between startups and venture companies, they also have things in common.

Expand your business perspective and career horizons

Both start-up companies and venture companies have not been established for a long time, so welfare programs, internal systems, evaluation systems, etc. are not complete compared to large companies, and the organizational structure is often unclear. However, precisely because the organizational structure is unstable, there is also the advantage of broadening the range of business perspectives and careers by experiencing cross-sectional work rather than specialized work.

Since both startup companies and venture companies have a small number of people, each individual has a wide variety of duties. Therefore, it can be said that there is a great deal of individual discretion.

Here, we will explain some of Japan’s leading startup companies.

Mercari, Inc.

Mercari Co., Ltd. is a startup company that operates the flea market app “Mercari.” Mercari, Inc. was founded in 2012 and listed on Mothers in June 2018 with a market capitalization of over ¥717.2 billion.

While there are various competing apps, it has achieved rapid growth by raising large-scale funding multiple times and setting up TV commercials and customer centers.

freee Inc.

freee Co., Ltd., which operates the cloud accounting software “freee” , is a domestic start-up company established in July 2012 and listed on the stock exchange in December 2019, about seven years after its establishment.

Freee Co., Ltd.’s mission is to “make small businesses the leading players in the world,” and we make it easy for individual business owners and corporations to start business, bookkeeping procedures, and account management. We have raised funds from major American venture capital firms, Recruit Holdings, and fintech funds, and are rapidly growing as a pioneer in cloud accounting software.

Smart News Co., Ltd.

Smart News Co., Ltd. is a startup company that operates the news app “Smart News” and is a privately held company founded on June 15, 2012 .

Smart News Co., Ltd. is now a successful company with global expansion, but it originally started as a startup. With the mission of “delivering high-quality information from around the world to those who need it,” the news distribution platform “Smart News” uses AI technology to collect optimized news articles. We have raised large-scale funding so far, and in 2021 we will raise 25.1 billion yen , bringing the total amount raised to 44.3 billion yen. US-based Princeville Capital and Woodline Partners have newly participated in this procurement. This is a rare case among Japanese startup companies that achieved success overseas and was evaluated as an investment target.

Here we will explain about Japanese venture companies.

CyberAgent, Inc.

CyberAgent Co., Ltd. is one of Japan’s leading venture companies whose core businesses are advertising agency and game businesses . Founded in 1998 and listed on the First Section of the Tokyo Stock Exchange in 2014.

With the vision of “creating a company that represents the 21st century”, the company has launched various new businesses such as “Ameba Blog” and “AbemaTV” based on the cash earned from core businesses such as the advertising agency business. Masu.

Speee Inc.

Speee Co., Ltd. is a venture company whose core businesses include ad technology and digital marketing . It was founded in 2007 and was listed on the Tokyo Stock Exchange JASDAQ market in 2020.

With the vision of “Unraveling, attracting the future”, we are developing overseas business and DX business in domestic legacy industries such as real estate based on the profits obtained from core businesses such as digital marketing.

There is no funding from venture capital, etc., and we are developing our business based on the funds obtained from our own business.

Start Today Co., Ltd.

START TODAY Co., Ltd. is a venture company that started as an Internet import and sales site for CDs and records, and currently operates the apparel EC site ZOZOTOWN.

Start Today Co., Ltd. was established in 1998 and was listed on the First Section of the Tokyo Stock Exchange in 2012 . Our corporate philosophy is “Make the world cool, and bring smiles to the world.” By combining fashion and technology, we invest the profits we earn from our e-commerce site operations into technology.

At the time of its founding, it was a fashion-related e-commerce site, which was rare, but it has grown into one of the largest fashion-related e-commerce sites in Japan, based on the funds obtained from the import and sale of CDs and records on the Internet. .

Start-up companies are required to grow rapidly with innovation, and the required human resources change depending on the business phase.

Our company, HubSpot, was born in Boston, USA in 2006 as a small startup company providing marketing tools. Initially, there were only two people, Brian Harrigan and Dharmesh Shah, but as of 2021, the company has more than 4,000 employees globally, and the number of customers has exceeded 120,000 companies. I grew up.

We, HubSpot, have advocated the concept of inbound tourism since our founding, and have pursued technology to realize business activities that are close to our customers.