Early-stage business

Early-stage businesses usually have a tested prototype or service model and have already developed a business plan. This is the riskiest stage in the start-up life cycle and success is highly dependent on this phase.

During this stage, consumers or the customer market will be called on to evaluate and compare the value proposition, prices, quality and feasibility with already established competitors in the market. Also known as a beta test, the purpose of this test is to reach a minimum viable product or value offering to the market.

Usually, during this stage, companies have limited revenue, sales and low market shares.

Early-stage companies are appealing to some investors, as they are focused on finding rapid growth and potential high future earnings. However, with the high earning potential and developing companies, a risk of failure and total loss is to be considered.