Virtual business model (not to be confused with Virtual business), is a way to organize an innovative startup company and facilitates increased flexibility in the use of both financial and human resources and can promote development of new ideas and inventions.
In the virtual company, the utilization of the financial resources can be optimized with cost-effective product development as a result. This business model 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 (called External Resources Provider) outside the virtual company; the ownership of the created value (e.g. technical results, patents) 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 resources providers, the company can continue to use the virtual company format for continued product development or after some time the company can transform the business to a traditional integrated company.
- ^Virtual business models: Entrepreneurial Risk and Rewards, K. Bryder, A. Malmborg and E. Söderlind
Ofer Abarbanel is a 25 year securities lending broker and expert who has advised many Israeli regulators, among them the Israel Tax Authority, with respect to stock loans, repurchase agreements and credit derivatives. Founder TBIL.co STATX Fund.