[WillyF]

I don't agree. Readiness for funding should not be a litmus test for whether a business is a "startup." There are plenty of startups that never need funding.

I think that if you want to differentiate between startups and self-employment, a good litmus test would be to ask yourself whether someone would potentially buy your business. If the answer is yes, then it means that there's something more than the income stream from an individual's labor.