Do you believe that you have that idea that can change the world, and want to found a startup that will make millions, or perhaps billions?
Each year, new goods and services are developed by startups. They are the result of innovative, driven entrepreneurs with incredible ideas. If you are one of them and want to join the race to make it big, you must first know the startup industry well.
To help you with just that, we have collected various crucial stats that will give you a comprehensive overview of the industry.
General Startup Statistics
We begin our journey by trying to get a wide-encompassing picture of the startup industry so that you have a base on which you can understand the other niche categories we will discuss.
Let’s get started.
1. Half of all startups plan to continue offering employees the ability to work from home when the pandemic ends. (Startup Benchmarking Survey)
2. 32% of startups, as per a recent survey, considered acquisition as their exit strategy. (Startup Benchmarking Survey)
3. As per a survey by Silicon Valley Bank, however, 58% of US startups had acquisition as their exit strategy. (Silicon Valley Bank)
4. As per a recent survey, 24% of startups used Quickbooks as their financial accounting software solution. (Startup Benchmarking Survey)
5. 44% of startups had annual revenue of less than $1 million, as per a 2020 survey. (Start and Scale-Ups Confidence Survey)
6. 1 in 4 startups say they plan to hire remotely in less expensive markets due to the wage rates of employees. (Qualtrics)
7. As far as revenue is concerned, Fintech startups had the highest median revenue at $474k, followed by the consumer sector at $450k, frontier tech at $389k, health tech at $342k, and enterprise at $308k. (AngelList)
8. Founders identified driving high growth & talent management as their top two challenges. (Innoven Capital)
9. 45% of founders rated government efforts to improve the startup ecosystem as Good / Excellent. (Innoven Capital)
Startup Success Rate Statistics
An important thing to know if you are planning on starting up is what percentage of them succeed. This will help you gain a realistic perspective on how tough it can get.
1. Only about 10% of startups actually achieve success. (Startup Genome)
2. Startup Genome research demonstrates that only 1.5% of startups produce a successful
exit of $50 million or more. (Startup Genome)
Startup Failure Statistics
Startups fail all the time. You must also understand what is the startup failure rate, the reason why startups fail, and a few related things, so that you can keep your expectations in check, as well as understand what are the causes of failure.
1. According to research by Startup Genome, startup failure rates are about 90% on average. (Startup Genome)
2. 63% of startup founders and CEOs say their business has declined or stalled due to the pandemic. (Qualtrics)
3. 82% of startups said that signing on new customers was their biggest hurdle back in 2020, and for 67% of them, it would remain a problem in 2021. (Start and Scale-Ups Confidence Survey)
Startup Growth Statistics
Having seen a brief overview of startups, we now look at the kind of growth they typically experience, what domains do better than others, as well as what the priorities are of most startups in terms of growth.
If you are to open a startup, this will help you understand the things you can do to grow and do well for yourself too.
1. Reduced or delayed sales remain the key concern amongst startups, and they have experienced cash flow/liquidity issues. (Start and Scale-Ups Confidence Survey)
2. Startups realized an average of 33% growth in 2020 and expected 70% growth in 2021. (Start and Scale-Ups Confidence Survey)
3. As per a recent survey, 2 out of 3 startups are seeking additional funding. (Start and Scale-Ups Confidence Survey)
4. New customer acquisition was the major concern for 85% of respondents in achieving their desired growth. (Start and Scale-Ups Confidence Survey)
5. Startups in two sectors— 41% of consumer and industrial products and 36% of life sciences and health care—are more likely to pursue merger opportunities. (Startup Benchmarking Survey)
6. 46% of startups in financial services and 37% of technology, media, and telecommunications startups are most likely to pursue acquisition by another company. (Startup Benchmarking Survey)
7. Despite setbacks from the pandemic, 49% of startups are still planning to pay current and future employees more salary, and 43% of startups are planning to pay more bonuses. (Qualtrics)
8. 83% of startups on AngelList that had their share price change in Q1’22 saw that share price increase. (AngelList)
Startup Funding Statistics
We just looked at how startups grow, and one of the main causes of growth is often funding.
If you are a new startup, it is highly likely that you will look for funding, and it is important to know what kind of funding startups get to navigate your way through it.
1. Once companies raise more than $100 million in funding, they are significantly more likely to pursue an IPO or merger and to have an exit timeline of two years or less. (Startup Benchmarking Survey)
2. Until they top $100 million in funding, startups are most likely to pursue acquisition by another company. (Startup Benchmarking Survey)
3. When asked what they thought of the funding environment for a startup like theirs, 41% of respondents said that it was getting harder to get funding. (Silicon Valley Bank)
4. 42% of funding for startups came from venture capital funds, as per a 2020 survey. (Silicon Valley Bank)
5. 88% of startup founders are worried about the current fundraising environment and ranked a lack of operating funds as their top challenge in 2022. (Qualtrics)
6. Median valuation of a Pre-Seed startup in the 50th percentile was about $10 million, while the valuation of a Series B 50th percentile startup was $250 million. (AngelList)
7. 2021 had the highest record funding ever for startups, raising a whopping $311B over the course of the year. (iTechArt)
8. Funding for private startups was received in all fifty states, with California getting 42% of all funding, followed by New York at 14%, and Massachusetts at 10%. (iTechArt)
9. 21% of all funding in 2021 went to late stage startups, while 13% went to early stage ones. (iTechArt)
Startup Costs Statistics
Funding is one of the things that really gives a startup a huge boost.
But what cuts away at a startup are its costs, and you must be well versed with them so that you are better prepared for all eventualities.
We will look at startup statistics for fintech startups, health tech startups, and a host of other upcoming small businesses.
1. Eight out of 10 founders are worried about the rising cost of doing business due to inflation. (Qualtrics)
2. Fintech had the highest median quarterly payroll spend of nearly $250k. (AngelList)
3. As per Small Business Administration, an average startup, or small business owner, would require $19k to get started with their venture. (Small Business Administration)
Startup Demographics Stats
Having looked at startup costs, we now turn the chapter and look at a facet of startups that is certainly great for its growth: diversity.
There is an industry-wide consensus that the diversity of employees makes a company great. If you too want that growth in your company, you should know some numbers about it.
1. 68% of startups said improving the diversity of their teams is a very important focus area this year. (Qualtrics)
2. 21% of women between 35 and 44 years of age are most likely to be starting a business, as are about 23% of men in the same age range. (Babson College)
3. The graph below shows total entrepreneurial activity by gender in the US adult population between 18-64 Years of Age. (Babson College)
4. According to another report, 77% of companies have less than 20% women in top positions. (Innoven Capital)
If you want to succeed in your entrepreneurial endeavors, you need to know the startup industry well and get a comprehensive perspective of how things work.
If you want to thrive in the long term, you and your startup must learn how to adapt to changing trends while being sustainable and efficient. We hope these startup statistics will help you identify this environment and its trends.