What is the primary purpose of startup capital?

The primary purpose of startup capital is to provide the necessary funds to launch a business. This includes covering initial expenses such as purchasing equipment, securing a location, acquiring inventory, and other costs associated with getting the business operational. Startup capital is critical in the early phase of a business because it ensures that all foundational elements are in place before revenue generation begins.

While ongoing operations and employee salaries are important aspects of a business's financial structure, they come into play once the business is already operational. Research and development funding is also vital but is typically more relevant to businesses focusing on innovation rather than the initial launch phase. Therefore, startup capital's essential role is to set the stage for a new venture's success.