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The 20 Most Important Startup Statistics of 2019

Startup Statistics - Startup staff meeting

Last year was a great year for startups, and 2019 is going even better, due largely to continued growth in wellness and high-tech. According to the latest startup statistics, new companies are having little trouble attracting investments. In some countries startup investments are on track to double compared to 2018.

The internet’s to blame for all this good news, of course, or almost all of it. Not only does it serve as a platform for innovative new applications and services, but it’s a vital medium for getting news of innovations out to potential customers and investors.

The abundance of opportunities has led to increased competition. Entrepreneurs face higher stakes and new challenges. But venture capital is flowing freely in America’s booming business economy. Startup failure rates are sobering, but given the potential rewards, a record number of entrepreneurs and their backers are prepared to take a risk. 

Changing tides. Great rewards. Unexpected dangers. They’re the essential elements of a good pirate movie and they’re facts of life for entrepreneurs. That’s why we’ve created this page: cogent facts and pithy explanations to help you create solid business plans and flexible strategies for keeping new ventures afloat. Whether you’re launching a business or considering an investment, you’ll find all the essential statistics here.

Key Statistics About Startups – Editor’s Choice

  • Only 50% of businesses with employees survive five years.
  • The United States was home to 30.2 million small businesses in 2018.
  • San Francisco and Silicon Valley are the epicenter of entrepreneurship, home to 13.5% of all global startup deals.
  • 53% of American startups have at least one woman in an executive position.
  • 30% of American small businesses think now is a good time to expand.

1. More than 69% of American entrepreneurs start their businesses at home.

(Global Entrepreneurship Monitor)

Business startup statistics show that making your home a base of operations for a new company is nothing unusual – especially considering how positively that decision can impact your monthly costs. Curiously, working from home isn’t limited to startups. While 55% of new businesses start in the garage, 59% of established small businesses are still run from their founders’ homes.

2. Only 50% of businesses with employees survive past the first five years.

(U.S. Small Business Administration)

Data from the Bureau of Labor Statistics indicates that the first years can be unstable and volatile for new businesses that employ people. A third of all of young companies fail within two years and about half within five, when the attrition rate falls. Small business statistics like these prove that good business strategies and quality management are key to pushing through that initial volatile period. The percentage of companies that fail drops after five years. That makes sense – weaker products and services wash out during the early years. The data also suggests that at five years companies mature and stabilize within their markets.

3. 64% of American small business owners are currently hiring.

(National Federation of Independent Business)

Research on small businesses points to a continued increase in the hiring rate, which has risen steadily since the historic lows of the Great Recession of 2009. The U.S. economy has never offered more job opportunities to people than it does now. In fact, employers report that it is increasingly hard to find finding qualified workers. Small business stats show that a staggering 54% of firms report finding very few qualified applicants – or even none – for open positions.

4. 30% of American small businesses feel like now is a good time to expand.

(National Federation of Independent Business)

The NFIB’s May 2019 shows that optimism has reached record-high levels in startups and small businesses. Surveyed companies expect to expand operations, boost capital spending, and increase sales.

5. Homeowners are 10% more likely to start a new business.

(U.S. Small Business Administration)

Small business startup statistics demonstrate that prudent entrepreneurs understand that a solid financial foundation – like owning a house – is necessary for starting a new business venture. Not only does a house allow you to set up your initial base of operations in the garage, but it can also serve as a collateral for small business loans.

6. A 60-year-old startup founder is three times more likely to succeed than a 30-year-old founder.

(Kellogg Insight)

The same study found that a 50-year-old is more than twice as likely to achieve success as a 30-year-old founder, demonstrating that experience is one of the most important factors when it comes to creating a thriving business. Startup failure rate statistics indicate that executing strategies and creating tactics get easier with higher levels of experience. It is very important to feel comfortable enough to lead and that you understand exactly what not to do.

7. ByteDance, maker of Toutiao, is the most highly valued startup company in the world, at $75 billion.

(Statista)

In the entrepreneurial world, the term “unicorn” is reserved for privately held startup companies that are worth more than $1 billion. In 2003 when the term was coined there were just four unicorns. Now there are 145 in the U.S. alone. The Chinese mobile-content platform Toutiao is the world’s top unicorn, with an estimated value that’s $19 billion higher than its nearest competitor’s.

8. 42% of startups fail because they offer products or services that the market doesn’t need.

(CB Insights)

Startup statistics from 2018 show that a good business idea is all about demand. It doesn’t matter how good your product or service is if no one wants it. Running out of cash is the second most common reason for failure, at 29%. Having the wrong team for the job came in third, with 23% of founders identifying it as the main reason for their lack of success.

9. More than 78% of small businesses reported profits in 2018.

(Guidant Financial)

Small business growth statistics from 2018 show corporate profitability at its highest level in four years. A favorable economic climate has helped small business owners sleep at night while enjoying higher profits. Invited to rate their happiness on a scale of 1 to 10, entrepreneurs in Guidant’s survey averaged 8 – with 53% assessing their happiness at 9 or higher.

10. There were 30.2 million small businesses in the U.S. in 2018.

(U.S. Small Business Administration)

Entrepreneur statistics from 2018 reveal growth of more than 1.5 million companies compared 2015. American small businesses employed 58.9 million people in 2018, which represents almost half of the country’s entire private workforce. The growth in private-sector employment coincided with historic drops in unemployment, which fell 0.6% compared to 2017.

11. 79.7% of U.S. small businesses employ only the founder.

(National Association for the Self-Employed)

Research on small business and startups shows that there is huge potential for expansion. Those plans are on hold at most companies, however. Four out of five companies are one-person shops. Startup statistics from 2016 and later show that 16.6% of small businesses have fewer than 10 employees and that only 2.2% have 10 to 19 people working for them. 

12. 77% of startups rely on personal savings for their initial funds.

(Gallup)

American entrepreneurs continue to rely on their own personal funds when starting businesses. In fact, the percentage of self-funded startups has increased by 4% since Gallup last investigated the matter in 2004. Banks remain the second most widely used source, providing cash and credit for 41% of entrepreneur’s startup needs.

13. The number of health, beauty, and fitness startups increased by 34% in 2018.

(Guidant Financial)

Small business statistics from 2018 record a sharp increase in these lifestyle-related startups – evidence of a generation that’s increasingly focused on wellness. Restaurants and food service had a healthy 14% increase compared to the last available research, but business services are still the biggest part of the market, representing 11% of startups and small businesses.

14. Advanced manufacturing and robotics tech startups are enjoying growth rates of 189.4%.

(Gruenderwoche)

Data from 2018’s Gruenderwoche Global Startup Ecosystem Report reveals that blockchain and agriculture-technology startups are growing quickly from relatively small bases. But it is artificial intelligence startups that are driving huge growth. Tech startup statistics make it clear that investors are bullish on future technology.

15. About 60% of American entrepreneurs believe that artificial intelligence is the most promising technology for investments.

(Silicon Valley Bank)

The same research shows that interest in AI is expected to keep steady well into the next decade. American entrepreneurs expect that autonomous transportation will see a sharp increase in investment in the third decade of the 21st century, with cleantech also emerging in the top five most promising industries. 

16. The San Francisco Bay Area, including San Francisco and Silicon Valley, accounts for 13.5% of all global startup deals.

(Center for American Entrepreneurship)

Startup funding statistics reveal that of the top 20 cities in the world for startup deals, half are in the United States. New York is the second largest deal site with 6.5%, while Los Angeles and Boston each host about 4% of the world’s startup deals. Bangkok has seen the biggest jump in venture capital investment, with an increase of more than 600% from 2010 to 2017.

17. 53% of American startups have at least one woman in an executive position.

(Silicon Valley Bank)

Research on small business statistics from 2019 show a 10% jump in women’s representation in the e-suite compared to 2018 – suggesting that gender parity is something U.S. startups are serious about. The report shows an 8% increase in the number of startups with women on the board of directors, too, rising from 29% to 37%. 

18.  60% of American entrepreneurs believe business conditions will improve this year compared to 2018.

(Silicon Valley Bank)

Optimism concerning improved business conditions has dropped 1% from 2018 but still remains high. Sunny forecasts peaked at 64% in 2016.

19. Immigrant entrepreneurs account for 25% of all new businesses in the United States.

(Forbes)

Startup business statistics show that the number of companies started by immigrants is the highest in California, New York, and New Jersey where they represent 40% of all new startups. The fewest immigrant-owned new businesses are in Idaho and North Dakota, where they represent less than 5% of all startups.

20.  81% of American small-business owners work overtime.

(Fundera)

Small-business owners generally work much longer hours than their employees. In addition to staying late after work, startup statistics from 2019 show that 89% regularly work weekends. In fact, 30% of owners work 40 to 49 hours per week, while 20% say they work 50 to 59 hours.

The Bottom Line

It’s never been a better time than right now to start a business in American. With record-low unemployment and a soaring economy, the American market is the most competitive and innovative in the world. Success is far from guaranteed, and work is more demanding than ever, but startup statistics show that with the right talent, solid organization, and a bit of luck, you can surely find success.

Sources

CB Insights

Center for American Entrepreneurship

Forbes

Fundera

Gallup

Global Entrepreneurship Monitor

Gruenderwoche

Guidant Financial

Kellogg Insight

National Association for the Self-Employed

National Federation of Independent Business

Silicon Valley Bank

Statista

U.S. Small Business Administration

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