When Is a Startup No Longer a Startup?

Article Submitted by: Mass Market Tech
Entrepreneurship and Small Business


This is a question I have been pondering in the shower. I have no clue. Any ideas?

 

Submitted: Oct 18, 2007    Views: 178    Comments: 1    Likes: 5   


This is a question I have been pondering in the shower.  I have no clue.  Any ideas or thoughts?




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There are specific accounting rules, which determine whether a company is a development stage enterprise. If you want to get more technical, SFAS 7 defines a development stage enterprise as a company that:

* Devotes substantially all its efforts to establishing a new business and has not begun planned principal operations; or

* Has begun operations, but has not generated significant revenue.

A development stage enterprise devotes most of its efforts to financial planning; raising capital; exploring for natural resources; developing natural resources; research and development; establishing sources of supply; acquiring property, plant, equipment, or other operating assets, such as mineral rights; recruiting and training personnel; developing markets; and starting up production.

A company that is expanding or developing a new product line would not qualify as a development stage company because it is not devoting most of its efforts to establishing the business. However, a subsidiary of an established firm could be so considered if it issues separate financial statements. The consolidated financial statements would follow reporting practices of an established enterprise.

Posted: Oct 19, 2007

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Thanks for the information!



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