In this article, We will discuss Startup Statistics 2023
Thousands of eager founders start a new firm every year, full of optimism and anticipation. Unfortunately, data on startup failure rates reveal that more than 50% of them will be gone in four years.
Let’s set that stat aside for a moment while we go through some more inspiring and encouraging startup data.
There are firms that survive the crucial 4-year period, and the statistics below will demonstrate to you how many do & what you can do to improve your chances of success.
Startup Statistics 2023
- In the United States, 69 percent of entrepreneurs start their firms from home.
- A little more than 1/3 of startups fail due to a lack of profit or financing.
- The most successful firms have founders who are passionate about making a difference.
- In 2020, funding for artificial intelligence startups is expected to reach $8.2 billion.
- The global startup industry generated roughly 3 trillion dollars in value from 2017 to the initial half of 2019.
- Silicon Valley was placed first and second place in the Top Thirty Global Startup Ecosystems & Runners-up list respectively in 2020.
- Only 40% of startups succeed in becoming profitable.
- Competition is a startup’s greatest problem (19 percent ).
- According to the National Association of Small Firms, LLCs account for 35% of small businesses, followed by S-corporations that account for 33 percent, corporations which account for 19 percent, sole proprietorships account for 12 percent, & partnerships account for 2 percent.
Startup Statistics That Will Astound You
- Unicorn firms are startups worth 1 billion dollars or more, with ANT Financial being the most valued one worldwide at more than $150 billion.
- The United States accounts for around half of all Unicorn firms.
- Only 2 out of every 5 ventures are profitable, and 1 out of every 3 will either lose money or break even.
- In the United States, starting a firm takes only six days.
- A startup that has been mentored will expand 3.5 times quicker & raise seven times as much money.
Statistics on Startups by Country
- In terms of the number of startups, the United States leads the pack (63,703).
- India is ranked second on the list, with 8,301 businesses.
- With 5,377 startups, the United Kingdom takes third place.
- The majority of the highest-value companies are based in China and the United States.
- Chile is the world’s most entrepreneurial country.
- In 2021, the finest locations to start a business are Hong Kong, China, and New Zealand.
- Latin American business owners are thought to be the bravest.
Facts and figures on the Startup State of companies
- 45 percent of European companies reported having simple access to capital. 32 percent of European startups indicated they were having trouble acquiring finance.
- Self-funding is the predominant source of finance for 66% of European businesses, while business angels and venture capital firms account for 9% and 7%, respectively.
- Venture capital was the key funding source for 42 percent of firms in the United Kingdom, Canada, and the United States.
- For their venture-backed firms, Black & Latinx women founders garnered $3.1 billion in 2020.
- In the median seed investment round, a rising number of Black & Latinx women entrepreneurs have acquired more than $1 million.
Statistics on Startup Success
- Mining has the highest 5-year survival rate among new firms (51.3 percent ). If a company founder has had previous business success, they have a 30% chance of repeating their success with their current endeavor.
- 82 percent of successful entrepreneurs believe that their qualifications and expertise are sufficient to run a business.
- 14 percent of startups fail because they ignore the needs of their customers.
- The most difficult task for any new business is to generate fresh revenue.
- Healthcare startups in the United States were the most successful in 2017, bringing in 36.3 billion dollars in revenue when combined with Inc. 5000 enterprises.
- The epicenters of entrepreneurship, San Francisco & Silicon Valley, are home to 13.5 percent of total global startups.
Statistics on Startup Failure
- Around 90% of new businesses fail.
- Within the maiden year of business, 10% of startups fail.
- Regardless of industry, startup failure percentages appear to be relatively comparable.
- Within the second to fifth year, 70% of startups fail.
- Because they misjudged target market demand, 42% of businesses fail.
- Because of a lack of finance and personal funds, 29% of firms fail.
- In 2018, 82 percent of businesses that failed did so because of cash flow issues.
- The main reasons for small business failure are a lack of market need (42%), cash flow problems (29%), the wrong founding team (23%), being outcompeted (19%), pricing/cost concerns (18%), and a user-unfriendly product (17 percent ).
The COVID-19 Pandemic’s Impact on Startups
- Owing to the global pandemic, 77 percent of business entrepreneurs believe they will fail in 2020.
- Average startups have fired an average of 33 percent of their workforce since the outbreak began.
- As a result of the epidemic, four out of ten companies are in the red category, meaning they have 3 months or less of cash runway. Since the beginning of the epidemic, 72 percent of startups have seen a drop in sales.
- The drop was 32 percent on average.
- A revenue decrease of 40 percent or more was recorded by more than 40 percent of businesses.
- Because of the epidemic, an average of 22 percent of startups have reduced their expenses.
- Portugal was the hardest hit among OECD countries (Organization for Economic Co-operation & Development).
- Between March – April 2020, the number of new businesses registered in Portugal fell by 70%.
- France (54%), Hungary (47%), and Turkey (58%) have been severely impacted.
- In the Q2 of 2020, in comparison to the first quarter of the year, fintech deals declined to roughly 30%.
- The Q2 of 2020 saw the poorest deal count for Asian & European fintech firms since the Q4 of 2016.
Perspectives In The Post-Pandemic Era
- 31.2 percent of entrepreneurs are enthusiastic about starting a business, with some even preparing to do so in 2021.
- According to 32.9 percent of respondents, now is an ideal moment to set up a business.
- 63.9 percent of entrepreneurs said they were more inclined to start a new firm currently than in the preceding three months in February 2021.
- 7.7% of business owners stated they are less inclined to begin a firm now than they were three months ago.
- 37.3 percent said the pandemic piqued their desire in taking charge of their own destiny through business ownership.
- The pandemic has caused 28.8% of respondents to gravitate toward pandemic-resistant enterprises.
- In 2021, 72 percent of startup entrepreneurs expect the pace of hiring to pick up.
- The eCommerce, deep-tech, digital media & logistics sectors are the most likely to profit from the expected increase in hiring.
- According to analysts, the US economy will increase at a rate of 5% this year.
- Investors’ attention will probably move to more conventional sectors like airlines, energy, hotels, & banking in the post-pandemic years.
Financial Statistics, Facts, and Figures For Startups
Statistics on Startup Funding
- The quantity of depth in your data as well as the usefulness of your proposal deck are the two most important aspects that can influence the amount of funds you obtain when making a funding pitch.
- Fewer than 1% of firms succeed in becoming unicorns, such as Uber, Airbnb, Slack, Docker & Stripe.
- Venture capital funding hit a decade-high of $155 billion in 2017.
- For employer enterprises, 33% of initial capital is lower than $10,000.
- One out of every three small enterprises begins with lower than $5,000.
- Credit cards, lines of credit & Business Loans are used by three-quarters of new businesses.
- 65 percent of startups say they’re not sure they’ll be able to launch their business because they don’t have enough money.
- 93 percent of respondents estimated that they would run out of cash in less than eighteen months.
- Personal money (77%) was the most popular small company financing option in 2018, followed by bank loans (34%), borrowing from family and friends (16%), contributions from friends and family (9 percent), online lenders (4 percent), venture capital (3 percent), angel investors (3 percent) & crowdfunding (2 percent )
Statistics on Startup Costs
- Payroll is one of the most expensive startup costs in the United States, averaging roughly $300,500 for 5 employees.
- Personal money is used by 77 percent of firms to cover launch costs.
- Uber and Airbnb, two well-known unicorn firms, have gone into debt for $1 billion or more in order to grow successful.
- Tools for a startup can cost somewhere between $10,000 to $125,000. Medical offices, manufacturing and restaurants are the most expensive firms to start, each requiring over $100,000 to get going.
- One of the most difficult obstacles for a startup to overcome is the expense of health insurance.
- Construction, accounting, internet retail, and landscaping have the lowest beginning expenses, all of which are around $5,000.
- 73 percent of startups would like to boost their social media spending, while 57 percent want to raise their email marketing spending.
Diversity and Demographics of Startup Founders
Reasons for launching a Startup
- 26 percent of individuals who establish a small business claim they did so because they wanted to be independent.
- 23 percent expressed an interest in pursuing their passion.
- The chance offered itself to 19% of persons launching a new business, & they took it.
- Only 2% of new business entrepreneurs express dissatisfaction with corporate America.
- 7% of new business owners have been outsourced or laid off.
- 6% of those polled said they weren’t ready to retire.
- After a life-changing event like death or divorce, 3% of people launched a new small business.
- In 2019, the male-to-female entrepreneur ratio was 10:7.
- In 2019, 73 percent of small business entrepreneurs identified as male and 25% as female.
- A high school diploma or GED is required for 33% of those beginning a small business.
- An Associate’s Degree is held by 18% of the small business owners.
- A Bachelor’s Degree is held by 29% of the small business owners.
- A Master’s Degree is held by 16% of the small business owners.
- A Doctorate is held by 4% of people who start a small business.
- According to a 2018 study, a 60-year-old is thrice more likely than a 30-year-old to launch a successful firm.
- When it refers to age, the majority of small business entrepreneurs are between the ages of 50 and 59, with the least number being over 70. (40 percent ).
- People between the ages of 40 and 49 make up 25% of those who start a small business.
- 60-69-year-olds account for 18%.
- People aged 30-39 make up about 14%.
- 18-29-year-olds make up 4% of those establishing a small business.
- White/Caucasians own 71 percent of new businesses.
- Asian/Pacific Islanders make up about 11%.
- Black/African Americans make up about 7%.
- Hispanic/Latinos make up about 6%.
Figures For Startup Teams In Small Businesses
- Small firms account for 99 percent of all businesses in the United States, with fewer than 500 employees.
- Finding the appropriate staff for a startup requires 6 months on average.
- If a startup team has a lot of previous experience but only mediocre to poor collective vision and passion, it will fail.
- HR, payroll, and hiring procedures, for example, can take up to 40% of a startup owner’s working day.
- Firms with 11 to 50 employees have a higher failure rate than firms with more than fifty employees.
- If there are 2 founders, thrice the customer growth, and 30 percent more financing, a startup’s chances of success increase.
- A CFO is employed by more than half of all small enterprises.
Statistics on Employees and Outsourcing in Startup Jobs
- Freelancers accounted for just over 1/3rd of the US employment in 2020.
- Freelancers are used by 42% of small enterprises.
- Because of the epidemic, 34% of freelancers will be obliged to start fresh projects in 2020.
- By the end of the year 2021, freelancers will make up 42 percent of US employment.
- Small firms employ 47.3 percent of the private workforce in the United States.
- The average tenure of a small business employee is four years. China had far greater patent applications than any other country in 2020.
- Globally, there were 997,501 yearly patent applications in 1990, and the number had climbed to 3,224,00 two decades later.
- As of 2020, intellectual property services contributed $115.3 billion to the trade imbalance in the United States.
- Intellectual property costs more than any other commercial service in the United States.
Statistics on Startups By Industry
- Company services (11 percent), food-restaurant (11 percent), health/beauty/fitness (10 percent), general retail (7 percent), and residential services (6 percent) were the industries with the most small biz startups in 2018.
- Accounting/tax preparation/bookkeeping/payroll services (18.4 percent NPM), real estate lessors (17.9% NPM), legal services (17.4 percent NPM), management of companies & enterprises (16 percent NPM), & activities pertaining to real estate (14.9 percent NPM) are the 5 most profitable small biz sectors by net profit margin (NPM).
- Gas & oil extraction (6.9% NPM), software publishers (5.1 percent NPM), beverage manufacturing (3.7 percent NPM), semiconductor & other electronic component manufacturing (0.3 percent NPM), and forging and stamping (0.4 percent NPM) are the top 5 least profitable industries in the United States by Net Profit Margin (NPM).
FinTech Startups Statistics
- The fintech industry employs 7.1 percent of all startups worldwide.
- Successful financial businesses, according to the study, depend on data-driven iteration & constant user testing rather than just new technology. In 2018, worldwide venture capital fintech investment was $30.8 billion, a $1.8 billion increase from 2011.
- The average cryptocurrency and blockchain investment climbed by more than $1 million in 2018.
- There are thirty-nine venture capital-backed unicorns in the fintech business, worth a total of 147.37 billion dollars.
- The price of customer acquisition is the most significant hurdle for fintech firms.
Statistics on Construction Startups
- Construction has the second-highest failure rate, at 53 percent.
- In 2017, North American construction startups received $581.6 million in investment, up from 182.7 million dollars in 2013.
- Investors contributed to eighty-six construction startup deals last year. 1 of the least computerized industries is construction.
- A new construction startup’s odds of staying longer than five years is 36.4 percent.
- Artificial intelligence (AI) is expected to enhance construction industry startup revenues by 71%.
- Residential house construction is the fastest-growing segment of the construction industry.
Statistics on Technology Startups
- The average age of a tech entrepreneur is 39 years old.
- The largest tech market in the world is the United States, with a market value of $1.6 trillion in 2019.
- In the United States, on average, 20 technological businesses are formed each year, with revenues exceeding $100 million.
- Since about 2018, the tech firm sector has had the greatest failure rate (64%) of all industries.
- Each year, 20 technology businesses are formed, with average revenue of $100 million.
- Between 2007 to 2016, tech-related pay growth was 20%, compared to only 3% for the overall US economy.
- The number of electronics & computer manufacturing startups increased by 78 percent between 2007 and 2016.
- Over the previous five years, the robotics sector has increased by 1,400%. In 2020, investment in artificial intelligence is expected to reach $8.2 billion.
Statistics on Real Estate Startups
- Real estate startups generated 1.9 billion dollars in 2019.
- Proptech (property technology) firms are on the rise, with 255 launched in 2014.
- In 2017, more than 13 billion dollars was invested in proptech startups around the world. Approximately 31 percent of commercial property investors intend to fund proptech firms.
- Proptech companies will be partnered with 26 percent of commercial real estate investors.
- The largest money is invested in home real estate businesses that use AI techniques.
Statistics on Startups in the Future
- Artificial Intelligence is presently the most viable innovation technology, according to 60% of entrepreneurs, & will continue so for the next ten years.
- By 2025, the sharing economy business is estimated to generate $335 billion in revenue.
- The total market for green technology & sustainability is estimated to reach 28.9 billion dollars by 2024.
- In the coming years, there will be a surge in the number of entrepreneurs who have recently graduated from college.
- Healthcare (41.2 percent), transportation (25.5 percent), financial services (24.6 percent), artificial intelligence (16 percent), and eCommerce (13.5 percent) are the top 5 fastest-growing startup businesses by investment volume.
- A growing percentage of startup entrepreneurs are relocating to the Eastern Coast from the Silicon Valley “bubble.”
- It is critical to recognize that tailored marketing plays a vital influence on the profitability of your startup.
- The popularity of startup subscription boxes for fashion, lifestyle, food, and cosmetic products is expected to continue.
- More startups will seek to collaborate and open up to joint ventures.
- When questioned about long-term objectives, half of the CEOs thought an acquisition was their most likely option.
- The biotech business is worth roughly $295 billion in total, however, due to evolving DNA sequencing technology, more growth is projected in 2021.
FAQs On Startup Statistics
What is the industry with the highest rate of failure?
Construction enterprises account for the highest percentage of unsuccessful startups worldwide (20.2%) and the second-highest percentage in the U.S (13.7 percent ).
What percentage of businesses turn into unicorns?
A company's odds of achieving a unicorn status are 0.00006 percent. Furthermore, it takes an estimate of 7 years for a firm to mature into a unicorn.
How long does it take for a business to get off the ground?
The typical startup lasts 3 to 5 years before going out of business or being acquired by another company for its significant assets, such as intellectual property.
What proportion of startups are successful enough to go public?
Approximately 90% of startup companies that are funded do not reach the IPO (initial public offering) stage.
Conclusion: Startup Statistics 2023
Although the pandemic has caused some setbacks, enterprise and its passion are still very much alive and well around the world.
The global economy is beginning to open up, & more individuals are getting hopeful about taking the risk of starting a business and hoping to succeed.
The startup data I have provided should pique your interest rather than turn you off, and they’ll help you respond to the trends while remaining efficient and long-term.