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Startup Statistics

23 Startup Statistics That Will Encourage You to Start a Business

  • Nemanja Petkovic
  • May 22, 2020

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 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 Small Business Statistics 

  • Over 70% of startup founders eventually realize that their idea doesn’t bring anything new to the table.
  • There are more than 30.2 million small businesses in the US.
  • 31% of all small business owners have an Associate’s degree.
  • 58% of small businesses get started with less than $25,000.
  • 73% of small business owners are men.
  • On average, it takes a startup six months to hire someone.
  • 90% of all startups fail eventually. 
  • The older you are, the more likely it is for your startup to succeed.
  • In the UK, one new company is formed every minute.
  • There are more than 43 million small businesses in China.

The Leading Small Business Statistics  

1. Over 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 awesome idea, but 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. There are more than 30.2 million small businesses in the US.

(SBA)

If you ever wondered about the total number of small businesses in the US, you’ll be glad to know that the SBA has that answer. They comprise a whopping 99.9% of all companies in the US, but they only employ 47.5% of the entire workforce. 

3. Lack of willingness to take risks is the main hurdle to entrepreneurial success. 

(Kauffman)

According to a survey conducted by the Kauffman Foundation, 98% of entrepreneurs have realized this to be the case. However, there are other factors. 

93% of survey participants say that time and effort were the main problems, whereas 91% say that the lack of funding is the issue. 

4. As many as 38 million businesses in the US are home-based.

(Incfile)

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 these entrepreneur statistics from 2017. Working from home is not a bad idea, especially when you consider that these 38 million businesses generate a total $427 billion annually. 

5. 73% of small business owners are men.

(Guidant Financial)

That also means that merely 27% are women, which is barely above a quarter of all business owners. 

As for the age difference, 41% are millennials, 44% are Generation X, 12% are boomers, and just 2% belong to the oldest among them — the silent generation. 

6. 31% of all small business owners have an Associate’s degree. 

(Guidant Financial)

According to the same small business statistics, 30% only have a High School diploma, which shows that higher education is not a prerequisite for starting a business. As for the rest, 17% have a Bachelor’s degree, 18% have a Master’s degree, and merely 4% have a Ph.D. 

7. 58% of small businesses get started with less than $25,000.

(Small Business Trends) (Dynadot)

What’s more, a third of them get started for less than $5,000. So, if you want, you can start a business for as little as a few thousand dollars. 

However, you’ll still have to get more money eventually if you want to be one of the up and coming tech companies such as Wish, Magic Leap,  or Snowflake, or at least count yourself among the total number of startups in the world. If you want to do it right now, know that it will only take you six days to do it — that’s how long it takes for an average business to get started in the US. 

8. 66% of small businesses hire other small businesses.

(FreshBooks)

This means that an overwhelming majority of businesses tend to outsource some of their work to other small businesses, thus boosting the small business economy in the process.

9. Most venture capital firms are only interested in making investments of $250,000 or more.

(Money Crashers)

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. 

10. According to one survey, about 1% of US startups evolve into unicorn startups.

(CBInsights)

Sorry to disappoint you, but becoming the next Uber, Slack, or Airbnb is not as easy as it sounds!  

As much as 67% of startups stall in the VC process at some point and 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.

11. Female startup owners received merely 2.2% of the total VC money in 2018.

(Fortune)

It is the age of equality, yet according to these startup statistics from 2018, female owners received just $2.86 billion VC money, whereas male owners got a staggering $109.36 billion. We still have a long way to go for women to be considered equally competent in leading a business venture as men. It’s unfortunate, but true nevertheless. 

12. 77% of business owners state that most of their initial startup costs were covered with personal funds.

(Lendio)

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. 

13. On average, it takes a startup six months to hire someone. 

(Forbes)

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. 

Startup Statistics & Facts on Success and Failure

14. 90% of all startups fail eventually. 

(Failory)

Roughly 137,000 new businesses are created every day across the world, which is nothing to sneeze at for sure. Moreover, since 90% of these eventually end up closing down, that roughly translates to about 123,300 (startup) failures every day. If you don’t want your startup to be part of this staggeringly high startup failure rate, then you need to focus on the following:

15. Merely four traits connect all successful businesses: having mentors, persistent leaders, a disruptive business, and knowing the market (and your target audience).

(Failory)

On the other hand, what each failing business has in common is a lack of experience, incompetence, and growing personal problems amongst the founders. 

16. 70% of small businesses fail by the 10th year of their existence. 

(Fundera)

If you’re looking to know more about the small business failure rate, you’ll notice that: 

  • 50% of small businesses fail by their 5th year, 
  • 30% by their 2nd year, and 
  • as many as 20% fail during the very first year of their existence.

In essence, the longer a business exists, the less likely it is to survive. Yet numbers are just that — numbers, and if you focus on making your business work, the percentage of businesses that fail won’t have any effect on you whatsoever. 

17. The older you are, the more likely it is for your startup to succeed. 

(Kellogg Insight)

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 to know that the average age of leaders, of companies which increased in size and revenue in the first five years of existence, is — 45. 

18. If you already had a successful business in the past, your next venture faces a 30% small business success rate.

(Inc.)

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.

19. 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, as per startup statistics for 2020. 

Worldwide Startup Facts & Stats  

20. Israel is the world’s leading startup country, as it has the most startups per capita.

(Forbes)

Israel is a small country with around 8.5 million people, yet it has a startup for every 1,400 people! What’s more, between 1,100 and 1,380 new startups are created every year there, but as many as 80% fail.

21. In the UK, more than one new company was formed every minute in 2018/19.

(Micro Biz Mag)

According to the latest startup statistics for the UK, this translates to almost 77 new companies per hour, 1,843 per day, and 672,890 per annum. 

The idea of having your own company is extremely popular in the UK, judging by the fact that 65% of UK employees want to start their own company.

22. India has the world’s third-largest startup ecosystem, with more than 9,000 startups in 2019.

(Economic Times) (Statista) (Tech Crunch)

Around 1,300 new startup companies were added to the pool in 2019, whereas the total number was almost half the current amount only three years ago — 4,750 startups to be exact. 

According to the same startup statistics for India, seven new Unicorns were created, increasing the total number of $1 billion startups to 24, which is also the third-largest in the world. 

The current estimates say that, by 2025, India will have between 95 and 105 Unicorns with a total valuation of $350 and $390 billion. 

For the sake of comparison, the US has 196 Unicorns and China 165, the only two countries above India in these rankings. 

23. There are more than 43 million small businesses in China. 

(Statista)

According to startup statistics, their numbers are growing at a rapid year-after-year rate. Roughly 5 million more are added to this massive pool each year. Just five years ago, there were fewer than 21 million of them. 

Moreover, if you remember the numbers for the US, there are almost 13 million more small businesses in China than in the US, which is a sizable difference, to say the least.

FAQs

How many startups are there in 2019?

(SBA) (Get2Growth) (Statista)

We have already seen that there are more than 30 million small businesses in the US. According to the data we’ve been able to find, there are around 305 million startups, and only 1.35 million of these are startup tech companies. 

What’s also interesting is that there aren’t many successful exits. The latest data from Statista states that there are merely 4,228 startup exits worldwide. 

How many startups are created each year?

(Get2Growth) (Chron)

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 600,000. That number peaked back in 2006, and it kept declining or nearing 627,000 per year ever since. 

What percentage of startups succeed?

(Entrepreneur) (Forbes) 

As we’ve already seen, the failure rate differs depending on the longevity of the company. 

  • After five years of existence, half of all startups fail
  • after 10 years, more than 70% of them fail
  • after 15 or more years, 75% of companies fail 

As for all startups, in general, 90% of them fail eventually. 

What percentage of startups fail in the first year?

(Fundera) (Investopedia)

Only 20% of businesses fail in the first year of their existence. That said, you shouldn’t let your guard down, and you should work hard during this first year to develop the product or service your audience wants. After that, it’s all about marketing it successfully. 

The Bottom Line

Searching for startup statistics like these is 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. Hopefully, the numbers, facts, and figures in this piece will end up giving you precisely the insight you need to succeed. And now, back to work!

Sources:

  • CBInsights
  • Chron
  • Dynadot
  • Economic Times
  • Entrepreneur
  • Failory
  • Forbes
  • Forbes
  • Forbes
  • Fortune
  • FreshBooks
  • Fundera
  • Get2Growth
  • Guidant Financial
  • Inc. 
  • Incfile
  • Investopedia
  • Kauffman
  • Kellogg Insight
  • Lendio
  • Micro Biz Mag
  • Money Crashers
  • SBA
  • Small Business Trends
  • Statista
  • Statista
  • Statista
  • Tech Crunch
  • The Next Web
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Nemanja Petkovic

A driven content specialist and copywriter, Nemanja takes pride in the fact that he was among the first to find success as a content writer in his hometown of Nis, Serbia. Now, many years later, writing is his profession and calling—something he loves and will never stop doing. By regularly following the trends in SEO and content marketing, writing every day on a variety of topics, he consistently strives for improvement and new challenges—never failing to provide top-quality content for his readers.

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Table of Contents:
  1. Top 10 Key Small Business Statistics 
  2. The Leading Small Business Statistics  
  3. Startup Statistics & Facts on Success and Failure
  4. Worldwide Startup Facts & Stats  
  5. FAQs
  6. The Bottom Line
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