There are many differences between a startup and a small business, including: Startups have aspirational growth plans whereas small businesses have modest ones. Startup owners aspire to make an impact on people’s life with their product or service. Small business owners aim to run a profitable venture while meeting the demands of their target audience. Startups mostly rely on equity funding while small businesses rely on asset funding and lines of credit. Startups are associated with a higher level of risk than small businesses.