Now’s the age of startups, and it has been so for quite some time. Every business leader looking to have a successful business has to be interested in everything startup-related to get that much-needed competitive edge. If you’re interested in running a business, or startup, of your own, you need to take a good look at some exciting startup statistics to get a better idea of what’s going on in the world of startups.
In this article, we’ll give you the numbers you can’t easily find online — numbers that will provide you with the insights you need before heading into startup waters. What’s more, we’ll get to the bottom of burning questions, such as how many startups fail, what it takes to succeed, and more.
Yet, before we begin, let’s warm up with some of the most exciting stats we’ve found thus far:
Top 10 Key Startup Statistics for 2021
- 1,385,980 new businesses were founded in the US In the Q3 of 2020.
- 68% of small business owners are men.
- California has the highest number of small businesses in the US — 4.1 million.
- On average, it takes a startup six months to hire someone.
- About 1% of US startups evolve into unicorn startups.
- Female startup owners received merely 2.3% of the total VC money in 2020.
- 91% of all startups fail eventually.
- 15 million businesses in the US are home-based.
- ByteDance is currently the highest-valued private startup in the world. It’s worth $140 billion in 2021.
- Global Switch is the highest valued unicorn in Europe, with a worth of $31 billion.
Small Business Startup Statistics
What do you need to know about small businesses and startups?
1. 70% of startup founders eventually realize that their idea doesn’t bring anything new to the table.
(The Next Web)
It’s one thing to have an excellent idea. Still, it’s a whole different story to think of something that actually provides a competitive advantage. This is the main problem most founders face, yet they realize it too late and thus fail to create a successful business venture.
2. Small business startup statistics show that California has the highest number of small businesses in the US — 4.1 million.
The Golden State had 4.1 million small businesses and 7.2 million small business employees, making it the state with the highest number of small businesses in the US.
Texas (2.8 million), Florida (2.7 million), New York (2.2 million), and Illinois (1.2 million) were close behind.
3. In 2020, there were 31.7 million small businesses in the US and 804,398 companies less than one year old.
The total number of startups in the U.S. in 2020 amounted to 31.7 million. According to the timeline, 2020 had the highest number of businesses under one year old, compared to, for example, the same period in 2019, when the number amounted to 770,609; or 2018 when there were 733,825 startup businesses.
Small businesses make 99.9% of the US businesses, with 60.6 million small business employees. They make an astounding 47.1% of US employees.
4. 15 million businesses in the US are home-based.
If you’re interested in starting a company from the comfort of your home, you will be glad to know that many companies start that way. According to entrepreneur statistics, working from home is not a bad idea, especially when you consider that it costs less than $5,000 to start.
5. 68% of small business owners are men.
That also means that merely 32% are women, which is barely above a quarter of all business owners.
As for the age difference, 41% are Baby Boomers, 46% belong to Generation X, 13% are Millennials, and just 1% belong to the youngest among them — Gen Z.
6. In the Q3 of 2020, 1,385,980 new businesses were founded in the US.
How many startups start every year and how were they affected by the pandemic? Each year, over 500,000 new businesses are created in the US.
Since 2013, the number of new enterprises experienced steady growth, reaching a record in Q3 2018 when 829,170 new companies were formed.
That record was broken in Q3 2020, when, despite the pandemic, 1,385,980 new businesses were created. In other words, the number of startups during the pandemic witnessed a massive increase.
7. Small business startup statistics imply 58% of small businesses get started with less than $25,000.
(Small Business Trends)
What’s more, a third of them get started for less than $5,000. In other words, there’s no need for personal loans and emergency fundings. If you want, you can start a business for as little as a few thousand dollars.
8. Most venture capital firms are only interested in making investments of $250,000 or more.
Unfortunately, they are not ready to just give it out to anyone who asks. According to the same small business stats, venture capital firms receive more than 1,000 applications a year, out of which barely a handful are chosen.
9. According to one survey, about 1% of US startups evolve into unicorn startups.
Sorry to disappoint you, but becoming the next Uber, Slack, or Airbnb is not as easy as it sounds!
If you want to know why do startups fail, statistics show us that 67% of startups stall in the VC process at some point. They either end up failing to exit or to continue receiving funding, let alone becoming unicorns. Still, you never know how disruptive your business can be until you try.
10. Female startup owners received merely 2.3% of the total VC money in 2020.
It is the age of equality, yet according to these startup statistics, female owners received just 2.3% venture capital money in 2020. That is 0.5% less than in 2019 (2.8%). Little wonder, bearing in mind women make approximately 12% of decision-makers at VC firms.
What’s more, most of these firms don’t have female partners.
11. 77% of business owners state that most of their initial startup costs were covered with personal funds.
Despite how many loan options exist out there, most startup owners tend to use their own money when starting a business. The same business startup statistics show that only 34% of respondents used bank loans, whereas 16% stated that most of the money came from friends and family.
12. On average, it takes a startup six months to hire someone.
Founding a startup is one thing, yet building a solid team that will help you grow is another thing entirely. So, brace yourself — it will take quite some time to hire the right person/people once you start your company.
What Percentage of Startups Are Successful?
How many startups are successful, and why or how do they fail?
13. 91% of all startups fail eventually.
Why do they fail? There can be many reasons. Most startups fail due to marketing problems (56%), team problems (18%), finance problems (16%), tech problems (6%), operations problems (2%), and legal problems (2%).
On that note, the first year is critical. The startup failure rate shows that 2 in 10 startups close down within the first year of operations.
14. Merely four traits connect all successful businesses: having mentors, persistent leaders, a disruptive business, and knowing the market (and your target audience).
On the other hand, what each failing business has in common is a lack of experience, incompetence, and growing personal problems amongst the founders.
15. The older you are, the more likely it is for your startup to succeed.
When it comes to startup success rate, age matters. The longer you’ve been around, and the more experience you have, the better the odds.
You’ll also be interested in knowing that the average age of leaders of companies that increased in size and revenue in the first five years of existence is — 45.
16. If you already had a successful business in the past, your next venture faces a 30% small business success rate.
This might sound like having no chance at all. Yet, the exact opposite is true. New founders of previously unsuccessful businesses have a 20% chance of succeeding, whereas first-time leaders have an 18% chance of success.
Once again, experience matters when it comes to finding success with a startup.
17. 82% of successful business leaders said that, despite limited cash flows, they still found success due to having the right qualifications and experience.
(Small Business Trends)
Although having the right experience and qualifications is important, an old-fashioned confidence boost can surely help as well.
Startup Statistics Worldwide
Which countries are best for startups, and who has the highest-valued unicorn company?
18. ByteDance is currently the highest-valued private startup in the world. It’s worth $140 billion in 2021.
(Statista) (Startup Talky)
ByteDance is a Chinese multinational internet technology company that develops mobile-first products like TikTok, Douyin (similar to TikTok), Toutiao, Xigua, Helo, and Lark.
The company has more than 60,000 employees in 126 cities.
19. The USA tops the number of startups by country with 82,763 startups.
(Startup Ranking) (Startup Ranking)
Giphy, Buffer, PicsArt, Coursera, and Skillshare are some of the most known US startup companies. India takes second place. The UK, Canada, and Indonesia are also in the top five.
20. $74 billion worth SpaceX is the most valuable unicorn company in the US.
Elon Musk, the creator of Tesla, has done it again with SpaceX, an aerospace manufacturing company.
Next in line is Stripe, a fintech company, currently worth $36 billion; followed by UiPath, a $35 billion worth robotic process automation software company.
Roblox, a video game designing platform prides itself on $29.5 billion. A software company Databricks is worth just a tad less — $28 billion.
21. According to the startup statistics from the UK, 665,495 new startups were created in 2019/2020.
(Micro Biz Mag) (Fund Squire)
In other words, that’s more than one small business company per minute, or 1,823 UK startups founded every day. 65% of the British wished to start their own business in 2020, and the numbers rose in 2021. Despite the coronavirus pandemic, Google searches for “how to start your own business” increased — 22,000 searches per month compared to 18,100 in 2020.
On a related note, the startup failure rate in the UK shows about 20% of businesses close within the first year.
Interestingly, crowdfunding is also one of the good options to found a company.
22. Global Switch is the highest valued unicorn in Europe with a worth of $31 billion.
This IT service management company is the highest valued unicorn in Europe. It is also the leading unicorn in the UK when it comes to market valuation.
There are over 590 unicorns in the world in 2021. 490 are headquartered in North America or Asia-Pacific, and about 60 are headquartered in Europe.
The US and China are homes to the majority of unicorns.
23. Startup statistics from India show the country has the world’s third-largest startup ecosystem, with 41,061 startups.
(The Economic Times) (Statista)
One97 Communications is the country’s most valuable startup. The mobile-internet company is worth $16 billion.
An educational company BYJU’s takes second place on the list ($13 billion), followed by OYO ($9 billion), the National Stock Exchange of India ($6.5 billion), and Ola Cabs ($6.3 billion).
The startup success rate in India is pretty high, given that the number of unicorn companies has amounted to 32. What is more, eight unicorns were formed in the first six months of 2021.
24. Germany is the best European country for startups.
Germany has a good economy (GDP of $3,846 billion), welcoming business climate, low corporate tax rate (15.825%), and a highly-educated workforce (83% of adult Germans have an upper secondary education), making it a perfect place to start a business.
Based on the startup success rate by country, the other excellent European countries to found a startup are:
- the UK
- the Netherlands
How many startups were there in 2019?
According to the most recent data, the total number of US startup businesses was 770,609 in March 2019. The number of startups increased to 804,398 in the same period in 2020.
What’s also interesting is that in October of 2020, there was an increase of business applications compared to 2019, despite the pandemic. In fact, there were 600,000 more business applications of which about 200,000 were linked to online retailing.
How many startups are created each year?
Every year, around 100 million new startups are created across the globe. As for the US, the numbers fluctuate each year, but it’s usually above 627,000.
What’s more, based on the 2020 data, there were 31.7 million small businesses in the US and 804,398 companies that were less than one year old. California is the state with the highest number of small businesses.
What percentage of startups succeed?
11 out of 12 startups fail, which means that about 91% of all startup businesses are destined to fail. What is more, two out of ten new businesses fail in their very first year (20% of all startups).
What percentage of startups fail in the first year?
20% of businesses fail in the first year of their existence. Sadly, the percentage only increases after the first year and rises to 30% in the second, i.e. 50% by the end of the fifth year of doing business.
Startup Statistics Summary for 2021
Hopefully, the numbers, facts, and figures in this piece will end up giving you precisely the insight you need to succeed.
Startup statistics like these are vital as they can help you gain a better understanding of what to expect, what to avoid, and how not to end up in the massive pile of failed startups.
And now, back to work!
- The Economic Times
- Fund Squire
- Grow Think
- Guidant Financial
- Insurance Journal
- Kellogg Insight
- Micro Biz Mag
- Money Crashers
- Nimble Fins
- Small Business Trends
- Startup Ranking
- Startup Ranking
- Startup Talky
- The Next Web