[brlewis]

Pardon me for quibbling: it's not about potential growth, but about having an extended period of time at the beginning without significant revenue. A shoe repair shop is not a startup because its debt is expected to stop deepening as soon as the doors are open, not because of its limited growth potential.

I got an accountant to do my taxes this year for the first time. He called my sole proprietorship a startup and did the accounting accordingly. Bootstrappers: keep records of all your expenses, even if it takes years for you to get everything going. Eventually it will all be deductible, amortized over 5 years from the time you start getting revenue.