Stealth startup

A stealth startup is a type of startup company that operates in quiet and silence to outsiders, avoiding public attention. This may be done to hide information from competitors (which may include non-disclosure agreements), or as part of a marketing strategy to manage public image and generate expectations and interest from potential clients. A Stealth Startup normally only operates in stealth mode for its first few years.[1]

The phenomenon is well known in the venture capital (VC) community. Since investors may have to disclose funding a stealth startup, their names are made public, but often only a general summary description is known about the company.[2]

Model

Startups operating in "stealth mode" often do so to protect new ideas and intellectual property:[3] If a startup is working on a revolutionary product that would be easy to replicate, operating as a stealth startup and not publicizing product details decreases the risk of the product being copied by other companies, as does having their employees execute NDAs. While this risk can be mitigated by patents, applying for a patent is a lengthy and expensive process, which is often not a viable option for a startup.

References
  1. "Lightspeed Venture Partners » the pros and cons of "Stealth mode"". Archived from the original on 2014-10-11. Retrieved 2014-10-07.
  2. Biz Carson (22 January 2016). "These 13 stealth startups have raised millions - Business Insider". Business Insider.
  3. Villano, Matt (17 October 2013). "Why Startups Launch in 'Stealth Mode' and Others Don't".
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