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A startup is a newly formed entity that offers specific products or services to the market. In other words, it is a company in its initial operational stages. Therefore, innovation is essential for every startup because it allows them to compete with other industries for market leadership. They generally start with a concept with high expenses and limited income but would eventually be focused on growing and scaling their business. Founders initially fund startups through family and friends, crowdfunding, angel investors, venture capitalists, IPOs, and loans.

All startup founders are looking for a real problem and solving those problems based on the potential customer or risk that can create business opportunities and impacts. They implement business plans to predict whether they are viable from the customer’s perspective. They also need good execution and tailored business applications to stay on top of things and successfully implement their business vision. Hence, the seven different types of startups are listed below.

IS YOUR COMPANY A STARTUP? What type of startup are you?

  • Types of startups/companies: A startup must be incorporated as a Private Limited Company, Registered Partnership Firm, or Limited Liability Partnership.
  • Age of the company: Its operational period should not exceed ten years from the date of incorporation.
  • Original Entity: It is not permitted to split up or reconstruct an existing company in order to qualify as a startup.
  • Annual turnover: Since its incorporation, the company shouldn’t have a yearly turnover of more than Rs.100 crore.
  • Innovate/scalable: They should aim to innovate new products/services or have an expandable/scalable business model with high potential.


1. Lifestyle startups:

Lifestyle startups are the first type of startup. These Lifestyle startups are where entrepreneurs generate income by living the life they love. They are their bosses. That means they work for themselves by being passionate about their job. Lifestyle startups are generally freelancing graphic designers, web designers, and coders.

2. Small business startups:

Small Business startups are the second type of startup. Entrepreneurs who start small businesses want to build a long-lasting and sustainable business rather than earn huge profits or scale up. They run their business to feed their families and live comfortably with family and friends. Travel agents, bakers, plumbers, grocery store owners, and carpenters usually commence this startup. Since it is a small business startup, they don’t need a business-facing app but a responsive specialised app that can navigate, order and track the products/services a customer may want.

3. Scalable startups:

Scalable startups are the third type of startup. These startups are just born to be significant. From the word itself, we can understand that they are scalable. Generally, these startups continuously scale themselves without a traditional exit strategy. Scalable startups are suitable for those with the thorough market knowledge and capability to efficiently and effectively explore more market opportunities. They have the potential to keep increasing their revenue while keeping their incremental costs at a minimum. Most founders believe that their ideas and mission will change the world. These startups hire the best of the best and bright among the brightest. They used to look for more venture capitalist to magnify their businesses. Examples of scalable startups include Google, Facebook, Uber and Twitter.

4. Buyable startups:

Buyable startups are the fourth type of startup. Technology and software-based startups make up the majority of buyable startups. They are typically web and app-based startups. The main aim of such startups is not to grow or build a billion-dollar business but to sell to larger companies in exchange for a hefty profit. Entrepreneurs of buyable startups should have startup ideas with enormous growth potential. They are always trying to raise money for their start-ups by opting for crowdfunding and angel funding.

5. Large company startups:

Large businesses must continuously innovate due to the shifting environment. They are supposedly large-scale startups. These companies will have an infinite lifespan if they continue to innovate in response to new competition, changes in customer tastes and preferences, and technological advancement. They have the potential to become a driving force for more disruptive innovation. Google and Android are two such startups. New markets are responsible for engaging customers with the sales of new goods and services.

6. Social startups:

Social startups are the sixth type of startup. The purpose of social startups is not to create a sustainable business but to positively impact society and the economy. These startups aim to make the world a better place to live in. They are less passionate and ambitious about earning profits when compared to other founders. In short, they provide donations, grants and charities to build positive social and environmental change worldwide.

7. Offshoot startups:

Startups aren’t always possible from scratch. Offshoot startups are separated from more prominent or parent companies to establish their entities. They are self-explanatory startups.


Startup India is a scheme undertaken by the Government of India. Indian Prime Minister Narendra Modi launched the project on 16th January 2016. The project planned to generate a robust ecosystem for innovation and entrepreneurship in India, thereby facilitating economic growth and nationwide employment vacancies. The main goal of this initiative is to enable startups to grow through innovation and development and stimulate the spreading of the startup movement. The benefits of Startup India include easier compliance, easier IPR facilitation, speedy exit mechanism, simplification of work, financial support, tax exemptions, networking opportunities, and many more. The startup India has initiated several programs, and Department duly manages them for Industrial Policy and Promotion (DPIIT).

Launching a startup is the first step toward achieving entrepreneurial goals. It appears exciting, but it requires a lot of critical thinking and hard work. People start businesses because they want to be self-sufficient and confident. This article discusses the various types of startups and how they grow. There are different kinds of startups in India. Our other blogs contain more information about the best startups in India. Be sure to check it out!

Whether you are an entrepreneur planning to begin your startup journey; you might lack critical insights and knowledge to acquire business results. Therefore book a slot with our experts to discuss your startup ideas. Scaalex has worked with many food startups in India and its founders to validate Business ideasFinancial ModellingBusiness plans and Investment advisory to scale up the startup. We ensure you get insightful consultation and validation with our domain experts.