A virtual business model (not to be confused with

Virtual business A virtual business (short: virtubis) employs electronic means to transact business as opposed to a traditional brick and mortar business that relies on face-to-face transactions with physical documents and physical currency or credit. History Ama ...

) is a way to organize a

startup company A startup or start-up is a company or project undertaken by an entrepreneur to seek, develop, and validate a scalable business model. While entrepreneurship refers to all new businesses, including self-employment and businesses that never intend ...

. In the virtual company, the utilization of the financial resources can be optimized with cost-effective

product development In business and engineering, new product development (NPD) covers the complete process of bringing a new product to market, renewing an existing product or introducing a product in a new market. A central aspect of NPD is product design, along w ...

as a result. This

business model A business model describes how an organization creates, delivers, and captures value,''Business Model Generation'', Alexander Osterwalder, Yves Pigneur, Alan Smith, and 470 practitioners from 45 countries, self-published, 2010 in economic, soci ...

is defined using several criteria; the company has a limited number of employees; the management has competence for product and business development; the company has financial resources to perform or has the ambition to find such financial resources; the company has a defined plan for the use of the financial resources; the majority of the operations are performed at organizations outside the virtual company; the ownership of the created value (e.g. technical results,

patent A patent is a type of intellectual property that gives its owner the legal right to exclude others from making, using, or selling an invention for a limited period of time in exchange for publishing an enabling disclosure of the invention."A ...

s) developed by the external resources providers belongs to the virtual company. After the foundation of the virtual company and the development of the business using external service providers, the company can continue to use the virtual company format for continued product development or after some time the company can transform to a traditional integrated company.

References

{{Reflist Business models