Startup company

A startup ecosystem can contribute to local entrepreneurial culture.
Diagram of the typical financing cycle for a startup company

Company or project undertaken by an entrepreneur to seek, develop, and validate a scalable business model.

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Venture capital

A financing diagram illustrating how start-up companies are typically financed. First, the new firm seeks out "seed capital" and funding from "angel investors" and accelerators. Then, if the firm can survive through the "valley of death"–the period where the firm is trying to develop on a "shoestring" budget–the firm can seek venture capital financing.
A highway exit for Sand Hill Road in Menlo Park, California, where many Bay Area venture capital firms are based
The technology-heavy NASDAQ Composite index peaked at 5,048 in March 2000 reflecting the high point of the dot-com bubble.
Diagram of the structure of a generic venture capital fund
Quarterly U.S. Venture Capital Investments 1995-2017
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Venture capital (VC) is a form of private equity financing that is provided by venture capital firms or funds to startups, early-stage, and emerging companies that have been deemed to have high growth potential or which have demonstrated high growth (in terms of number of employees, annual revenue, scale of operations, etc).

Entrepreneurship

Creation or extraction of economic value.

17th-century Walloon-Dutch-Swedish businessman Louis De Geer (1587–1652) was a pioneering entrepreneur and industrialist at the dawn of modern capitalism.
Emil Jellinek-Mercedes (1853–1918), here at the steering wheel of his Phoenix Double-Phaeton, was a European entrepreneur who helped design the first modern car
In 2012, Ambassador-at-Large for Global Women's Issues Melanne Verveer greets participants in an African Women's Entrepreneurship Program at the State Department in Washington, D.C.
Student organizers from the Green Club at Newcomb College Institute formed a social entrepreneurship organization in 2010.
Malala Yousafzai, a Pakistani activist, social entrepreneur and youngest-ever Nobel Peace Prize winner
Apple co-founder and longtime leader Steve Jobs (pictured in 2010) led the introduction of many innovations in the computer, smartphone and digital music industries
Dell Women's Entrepreneur Network event in New York City

While definitions of entrepreneurship typically focus on the launching and running of businesses, due to the high risks involved in launching a start-up, a significant proportion of start-up businesses have to close due to "lack of funding, bad business decisions, government policies, an economic crisis, lack of market demand, or a combination of all of these."

Disruptive innovation

Innovation that creates a new market and value network or enters at the bottom of an existing market and eventually displaces established market-leading firms, products, and alliances.

An 1880 penny-farthing (left), and a 1886 Rover safety bicycle with gearing
How low-end disruption occurs over time.

Disruptive innovations tend to be produced by outsiders and entrepreneurs in startups, rather than existing market-leading companies.

Angel investor

A startup ecosystem can contribute to local entrepreneurial culture.

An angel investor (also known as a business angel, informal investor, angel funder, private investor, or seed investor) is an individual who provides capital for a business or businesses start-up, usually in exchange for convertible debt or ownership equity.

Business incubator

"THE FACTORIES BUILDING. Toledo's new $500,000 "Infant Industries Incubator." from "Bramble's views Toledo, Ohio : diamond anniversary 1837-1912"
The building of the Business Incubator in Ulan-Ude, Buryatia

Business incubator is an organization that helps startup companies and individual entrepreneurs to develop their businesses by providing a fullscale range of services starting with management training and office space and ending with venture capital financing.

Silicon Valley

Region in Northern California that serves as a global center for high technology and innovation.

Silicon Valley derives its name from the silicon used in transistors and computer chips, pioneered in the region in the 20th century.
Established in 1931, Moffett Field in Sunnyvale/Mountain View has played a strategic role in Silicon Valley's evolution, researching and developing key technologies, first for the U.S. Military and then for NASA. Today it hosts the Ames Research Center.
Stanford University played a major role in the emergence of Silicon Valley, both through its academic programs and through its real investments into the local tech ecosystem, such as with the Stanford Research Park.
The HP Garage, dubbed the "Birthplace of Silicon Valley", where Bill Hewlett and David Packard (founders of Hewlett-Packard) began developing their audio oscillator in 1938.
Plaque commemorating Shockley Semiconductor Laboratory as the first high tech company in what would become Silicon Valley.
The first IBM plant in Silicon Valley, established in San Jose in 1943.
ARPANET, the predecessor to the Internet, began to be developed in 1966 by the U.S. Department of Defense and four research universities in California, including Stanford.
The Homebrew Computer Club was a highly influential computer hobbyist group in the 1970s and 80s that produced many influential tech founders, like Steve Jobs and Steve Wozniak. Pictured is the invitation to its first meeting in 1975.
Apple founder Steve Jobs introducing the iPhone in 2007.
Adobe World Headquarters in Downtown San Jose
Oracle in Redwood City.
PayPal in San Jose
Yahoo! in Sunnyvale
eBay in Willow Glen.
Cisco in the Golden Triangle.
Exotic cars outside the Hotel Valencia in Santana Row.
Silicon Valley Pride in San Jose.
Headquarters of The Mercury News, Silicon Valley's largest newspaper, in Downtown San Jose.
50 W. San Fernando Street in downtown San Jose is the site of the world's first radio broadcasting station, created in 1909 by Charles Herrold, the "Father of Broadcasting".
Googleplex in Mountain View
Meta Platforms in Menlo Park
Samsung in San Jose
Intel in Santa Clara
Netflix in Los Gatos
Tesla in Palo Alto

Silicon Valley is home to many of the world's largest high-tech corporations, including the headquarters of more than 30 businesses in the Fortune 1000, and thousands of startup companies.

Seed money

Startup financing stages

Seed money, sometimes known as seed funding or seed capital, is a form of securities offering in which an investor invests capital in a startup company in exchange for an equity stake or convertible note stake in the company.

Stanford University

Private research university located in the census-designated place of Stanford, California, near the city of Palo Alto.

Statue of the Stanford family on the Stanford University campus
Center of the campus in 1891.
Ichthyologist and founding president of Stanford, David Starr Jordan.
William Shockley, Stanford professor, Nobel laureate in physics, "Father of Silicon Valley"
An aerial photograph of the center of the Stanford University campus in 2008.
Marc Tessier-Lavigne is the president of Stanford University.
The original Golden spike on display at the Cantor Arts Center at Stanford University
Hoover Tower, inspired by the cathedral tower at Salamanca in Spain
Green Library
Bronze statues by Auguste Rodin are scattered throughout the campus, including these Burghers of Calais.
Felix Bloch, physics professor, 1952 Nobel laureate for his work at Stanford
Vint Cerf (BS 1965), co-leader of the Stanford team that designed the architecture of the internet
Many students use bicycles to get around the large campus.
The Leland Stanford Junior University Marching Band rallies football fans with arrangements of "All Right Now" and other contemporary music.
Herbert Hoover (BS 1895), 31st President of the United States, founder of Hoover Institution at Stanford, recipient of the Uncommon Man award
John F. Kennedy (attended 1940 ), 35th President of the United States
Interior of the Stanford Memorial Church at the center of the Main Quad
Hoover Tower, at {{convert|285|ft|m}}, the tallest building on campus
thumb|The new (2006) Stanford Stadium, site of home football games
Stanford Quad with Memorial Church in the background
The Dish, a {{convert|150|ft|m}} diameter radio telescope on the Stanford foothills overlooking the main campus
White Memorial Fountain (The Claw)

In addition, Stanford is particularly noted for its entrepreneurship and is one of the most successful universities in attracting funding for start-ups.

Venture round

Courtyard of the Amsterdam Stock Exchange (or Beurs van Hendrick de Keyser in Dutch), the world's first official stock exchange. The Dutch Republic's pioneering institutional innovations greatly helped revolutionize and shape the foundations of modern-day global investing. The formal stock market, in its modern sense, was an institutional innovation by the VOC managers and shareholders in the early 17th century. The first recorded professionally managed collective investment schemes (or investment funds), such as mutual funds, were formed in the 18th-century Dutch Republic.

A venture round is a type of funding round used for venture capital financing, by which startup companies obtain investment, generally from venture capitalists and other institutional investors.

Private equity

Private equity (PE) typically refers to investment funds, generally organized as limited partnerships, that buy and restructure companies.

Diagram of the basic structure of a generic leveraged buyout transaction
Diagram of the structure of a generic private-equity fund
Diagram of a simple secondary market transfer of a limited partnership fund interest. The buyer exchanges a single cash payment to the seller for both the investments in the fund plus any unfunded commitments to the fund.

Innovations tend to be produced by founders at startups rather than existing organizations, private equity firms targets startups to create value by overcoming agency costs and better aligning the incentives of corporate managers with those of their shareholders. This means a greater share of firm retained earnings is taken out of the firm to distribute to shareholders than is reinvested in the firm's workforce or equipment. When a private equity firm purchases a small startup it can behave like venture capital and help the small firm reach a wider market. However, when private equity purchases a larger firm, the experience of being managed by private equity may lead to loss of product quality and low morale among the employees.