Early-stage business

Early-stage businesses usually have a tested prototype or service model and have developed a business plan. This is the riskiest stage in the startup life cycle and the probability of success depends heavily on this phase.

During this phase, consumers (or the customer market) will be called to evaluate and compare the business value proposition's price, quality, and feasibility. This may include comparing the product or service with the existing competitors already on the market. This task is known as a beta test. The purpose is to reach a minimum viable product or value offering in the market.

Because of the early stages, the companies have limited revenues, sales, and market shares. Investors are focused on finding business opportunities to invest and turn a profit, and the prospect of rapid growth and potentially high future earnings attracts much attention. However, with the increased earning potential also comes a high likelihood of business failure and total loss.