Starting your very own business can be a tempting idea and an exciting journey. These informative startup statistics can help you get some more intel before taking the initiative.
However, reality shows this is much easier said than done. In general, many things need to go right for a business to pay off and start bringing profit.
So, here’s what you need to know from start to finish.
Top 10 Money-Making Startup Stats
- The US has approximately 137,534 startups.
- There are over 600 “unicorn” startups in the world.
- 95% of startup founders have a bachelor’s degree.
- 1 in 3 businesses gets off the ground with no more than $5,000.
- In the US, you can put a business in motion in only six days.
- 65% of employees in the UK would like to own a business.
- Over 69% of US founders started their business at home.
- Stats show that 82% of startups fail due to financial problems.
- Approximately 90% of startups don’t carry through.
- 80% of US startups stay around after the first year.
Essential Startup Statistics for 2021
If you need to get your facts about startups straight, this is the right place for you. Here, you can gather some extra knowledge on startups and how they begin.
1. There are over 600 “unicorn” startups in the world.
(Embroker, Profit From Tech)
The startup failure rate is pretty high, and very few startups succeed today, which is probably why those that become highly valuable are referred to as “unicorns.” Today, their number counts just slightly over 600.
So, what percentage of startups make it? That number is still minimal. Only about 1% of startups move onward to becoming a unicorn. Slack, Uber, or Airbnb are part of that small number.
2. Some of the most common means of financing startups include savings, bank loans, angel investors, and friends and family.
Research reveals that Americans spend $18,000 a year on non-essential things. So, if you’re planning on starting a business one day, don’t spend money on things you don’t need.
Startup funding facts show that some people opt for bank loans. They can be a bit risky, as they come with interest that you have to repay over a fixed period of time.
There are also angel investors — wealthy individuals, often entrepreneurs, who choose to invest in startups.
Finally, many people turn to friends and family when laying the foundations for a startup. But, if some problems appear, your relationship could be shaken up.
3. Business startup statistics showed venture capital-funded less than 6% of startups in the US in 2018.
(Oberlo, Profit From Tech)
VCs, or venture capitalists, are not that different from angel investors. The main distinction is that they are companies and not individuals. VCs are also included in the startup’s marketing and decision-making.
Startup funding statistics reveal that venture capitalists funded less than 6% of startups in the US in 2018. This might not sound like a big number, but it’s still one of the top three financing sources.
4. At 18.4%, financial services is the most profitable business to start.
Startup company statistics confirm that some of the most successful businesses to embark on are financial services, like financial planning, accounting, or tax preparation (18.4%).
Aside from that, real estate leasing services (17.9%), legal services (17.4%); medical outpatient clinics (15.9%); and property management and appraisal (14.9%) are also popular fields.
5. Startup statistics show that 95% of startup founders have a bachelor’s degree.
An impressive startup fact is that almost every entrepreneur has at least a bachelor’s degree. This shows that those with a higher education degree are more likely to venture into the field of entrepreneurship.
Of course, this doesn’t guarantee their success, but it is surely something to think about if you’re interested in following the same path.
6. Spending more money on marketing and sales might help you thrive faster.
(Profit From Tech)
According to the data on the startup growth rate, companies that spend more money on marketing and sales usually develop faster than those who spend less.
7. 1 in 3 businesses gets off the ground with no more than $5,000.
(Profit From Tech)
The amount of capital you need varies depending on the business you want to undertake.
Facts about startup financing show that around 33% of new businesses make a start with $5,000 or less. In contrast, 12% of startups begin with $250,000 or more.
8. 2020 and COVID-19 were a real rollercoaster for new businesses.
Startup statistics for 2020 show that many newfound companies barely survived 2020, being the shaky year it was.
However, some others managed to go, like robotic delivery, remote working, startups using 5G, virtual and telehealthcare, and online education.
Certain technologies experienced a major push, with a huge transit to online shopping, working, and socializing. The 2021 stats portray a similar case.
Global Startup Statistics
The UK and the US are two of the countries at the top of the global startup rankings, and there are some quite interesting stats about them.
From the fact that you can easily start a business in six days to the fact that most people do that from the comfort of their home, here’s everything you need to know about these giants.
9. In the US, you can put a business in motion in only six days.
(Profit From Tech)
As unbelievable as it might sound, startup statistics show that it takes less than a week to start a US business.
10. In the UK, there are around 18,100 searches of people asking how to start a business every month.
(Micro Biz Mag)
Startup statistics for the UK show about 18,100 searches a month in Google UK for “how to start a business.” That means people are eager to start something on their own.
11. Over 69% of US founders started their business at home.
(Profit From Tech)
Entrepreneur statistics reveal that more than 69% of the US entrepreneurs started their business in their home’s comfort. Undoubtedly, more and more people opt for remote work and have their business based at home.
12. 57.6% of the UK’s startups that were set up in 2013 didn’t last until 2018.
(Micro Biz Mag)
That means that less than half of the UK’s startups manage to succeed longer than five years. Success isn’t simple, but keeping a positive mindset is crucial.
13. 80% of US startups stay around after the first year.
(Profit From Tech)
Also, startup failure rate statistics show that 70% of businesses survive into their second year.
Moreover, 50% will survive their fifth year, and around 30% will pass their tenth year.
14. 65% of employees in the UK would like to own a business.
(Micro Biz Mag)
When surveyed on whether they want to start their own business, in January 2020, 65% of UK employees answered affirmatively.
On the other hand, 21% didn’t seem interested in doing it, and 14% weren’t sure.
15. Two out of five startups in the US are successful.
The startup success rate shows that 40% of startups in the US are booming, meaning more than half of the startups don’t make it.
As discouraging as it may seem, understanding what causes their failure can decrease the possibility of your startup failing, too.
16. The US has approximately 137,534 startups.
Not all countries have favorable outcomes with their startups. Some are more dynamic and prosperous, and others aren’t that financially rewarded.
The country with the highest number of startups in the world in 2020 was definitely the US.
The top five countries by their number of startups are the US with 137,534 startups, India with 8,999, the UK with 5,482, Canada with 2,807, and Indonesia with 2,201 — at the time of writing.
Startup Success Statistics
Everything you need to know about startup failure is here. Use these stats and facts as an asset to avoid disappointment.
17. The most successful startup in the world in 2020 was China’s Ant Group.
Since January 2020, China can be proud to have the tech company Ant Group (also known as Ant Financial), the most successful startup in the world last year.
18. First-timers have an 18% chance of succeeding, as startup stats show.
(Profit From Tech)
Interestingly, founders who have already had some profitable businesses in the past have a 30% chance of prosperity in their new quest.
On the other hand, those who have previously failed have a 20% chance of making it through the second time.
18. Two-founders’ startups are more successful.
Statistics on startup success reveal that If a startup has more than one founder, it has greater chances of making it through and performing considerably better.
Of course, this doesn’t mean that you shouldn’t do it yourself, but it’s always a good idea to find a partner and start a new venture together.
20. Mentored startups have more positive outcomes.
Startup founders have many things to take care of, so they are often overwhelmed and lost.
That’s why having an experienced mentor is very helpful. They will provide you with information and knowledge, find your ways to improve, and be your trusted advisers.
21. Startup failure statistics show that 82% of startups fail due to financial problems.
More often than you think, startups fail because of their finances. Knowing the average monthly credit card payment for business owners is $2,000 alone, this information doesn’t come as a surprise.
That’s why it’s vital to check your finances and consider all possible expenses beforehand and make sure you have enough, even for unexpected issues.
22. 7% of startups fall through as a consequence of bad decision-making.
Stats on startup failure show that some of these poor decisions involve hiring the wrong people (and keeping them for too long) or not developing the product’s right aspect.
These things are crucial to the company’s success, so it’s not hard to see how they could ruin a business too.
23. 14% of startups don’t make it because they disregard customer’s needs, according to the business startup facts.
Remember to always make your customers’ needs a priority, since 14% of new businesses that pay no attention to that — fail.
The customers are an essential part of your new business, so make sure you provide top-notch customer service.
24. According to startup business statistics, approximately 90% of startups don’t carry through.
Even so, don’t get discouraged. That doesn’t have to be the case for you if you develop a good strategic plan and understand what contributes to these startups’ failure (like the things we mentioned above).
25. 10% of new businesses don’t make it to the second year.
(Profit From Tech, Oberlo)
Startup company statistics reveal that 10% of startups experience failure in under a year.
So, the challenging part isn’t starting a startup but keeping it successful. After all, only 56% of the startups survive to their fifth year.
How long do startups take to become profitable?
Typically, it takes two to three years for a startup to make some profits.
Of course, that depends on many factors — some businesses can become successful right away, while it may take over three years before they become profitable for others.
Why do startups fail?
There are more than a few reasons for a potential failure.
Some of the reasons startups fail include money-related problems, the lack of market need, poor marketing, bad decisions, getting outcompeted, and lack of passion.
How many startups start every year?
The number of established startups every year rounds up to 100 million.
So, it’s safe to say that people are still enthusiastic about starting their own business despite all the challenges.
How many startups fail in the first 5 years?
It is estimated that around 45% of startups fail in the first five years of their establishment.
As discouraging as it might sound, the number of startups that succeed is still significant enough to motivate those who are the most passionate.
Which country has most startups?
The US and China have the largest number of startups and unicorns in the world. The States are leading with 64.7% unicorns while China has 13.8%.
India (4.1%), UK (2.5%), and Singapore (2.2%) follow, but Sweden (2.1%), Germany (2%), and Canada (1.6%) are very close, too.
All things considered, starting a new business is more challenging than one thinks. There are many contributing factors to think through.
Hopefully, these startup statistics will help you get the real picture and make up your mind about starting your own business.
Don’t let the fear of failure scare you off. Learn from the mistakes of others, and do your homework before you start.