The world of entrepreneurship is increasingly recognizing scale-up companies. Situated between the start-up and the unicorn, this structure arouses the curiosity of investors attracted by its ability to change scale at high speed. According to the study ” Scale-up Europe: Building Global Tech Leaders in Europe ” by Roland Berger, the European technology sector benefited from a record investment of 41 billion euros in 2020, defying the health crisis. This report highlights the urgent need to develop an ecosystem conducive to large fundraisings and IPOs, essential to propel European scale-ups onto the global stage.

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What is a scale-up company?
A scale-up is a company with very high growth, with a turnover that doubles at least every year. It employs between 10 and 249 people, raises funds from investors, and has a product/service successfully established on its market.

 

Scale-up: what are the differences between a start-up and a unicorn?

A start-up is in its early stages and is still looking for its market, unlike a scale-up that is already well established. Indeed, a start-up is a young shoot that has just launched and offers an innovative product or service, but which has not yet proven itself. It is therefore still in the testing phase, strategic pivots, and has not necessarily found its sustainable economic model.

Conversely, a scale-up already has a product that is successful with its customers. It has found its market, its positioning, and is able to develop quickly thanks to strong growth in its turnover. The scale-up is therefore no longer a risky hypothesis like the start-up can be, but a tangible reality supported by substantial revenues.

Furthermore, a unicorn is valued at more than $1 billion, which is not the case for a scale-up. A unicorn is a start-up that has successfully raised astronomical funds, allowing it to reach the symbolic status of unicorn. But not all scale-ups will become unicorns, even if some end up raising very large sums. A scale-up remains a company with high potential, which has already proven itself, but whose valuation can be variable.

 

Examples of scale-ups
France has more and more scale-ups that perform internationally. These include:

 

Characteristics of a scale-up
A scale-up first experiences hypergrowth , with a turnover that doubles every year minimum. Its growth is therefore very rapid over a given period, well above the sector average. This ability to scale very quickly is the trademark of the scale-up.

Then, it generally employs between 10 and 249 employees . Mature enough to already have a substantial team, the scale-up has not yet reached the indonesia whatsapp number list size of a large group. Its organization remains agile to support its unbridled growth. In addition, it regularly raises funds to accelerate its growth, particularly from business angels . These private investors are banking on its strong development potential. Successive fundraisings provide it with the means to achieve its ambitions.

Another essential characteristic: the scale-up already has a product or service that is well established on the market , with a real product market fit .  To support its development, the scale-up can also rely on digital tools such as a visual identity generator to structure its communication or a CRM dedicated to start-ups to effectively manage its customer relations.

Finally, the objective of a scale-up is clearly to change scale to quickly become a mature and sustainable company. This desire for rapid growth is all the more relevant in the European context where, according to the LETS 2023 initiative led by France Digitale , Europe has 135 exemplary scale-ups. These companies stand out not only for their valuation but also for their international impact and the sustainability of their business model.

 

How does the transition from start-up to scale-up take place?

There are several key steps that allow a start-up to take the plunge and become a scale-up:

Success of the elevator pitch to convince investors. A powerful pitch will attract business angels or venture capital funds who will inject capital;
Obtaining substantial funding which will give the young company the means to develop quickly;
Attract experienced profiles to strengthen the team and the company’s skills;
Implement a strategy to develop abroad in Sad Life Box order to boost activity and provide additional credibility;
Optimized management and proven methods will promote controlled hypergrowth.

 

What are the challenges of a scale-up?
A scale-up must maintain hypergrowth over several years . Maintaining such a growth rate requires a solid long-term strategy from managers, with excellent execution. In addition, it must recruit massively to strengthen its teams, which is not easy. Finding the right profiles and attracting them requires time and resources.

The scale-up must also succeed in quickly integrating its many new employees . Making them operational as quickly as possible is essential to not slow down expansion. It must also know how to manage the growing complexity of its organization, with an increasing number of services to coordinate.

Finally, it must respond to pressure from investors, who expect strong growth and profitability that meets their expectations.

 

To go further, create a simple and effective business plan with the free template , or discover HubSpot’s free CRM.

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