20 Key Startup Statistics

Do you have an idea that would make a great startup business? If so, you’re going to want to check out this statistic based post on startup statistics. With over 305 million startups being created every year, it’s fair to say most people dream of starting their own businesses from their ideas.

Whilst the majority of most startups sadly fail, those that are successful tend to become market disruptors, making millions if not billions of dollars in revenue and creating tens of thousands of jobs. 

Startups are one of the leading business models worldwide, leading to economic growth and innovation in a wide range of industries, but what does the world of startups look like in 2022? That’s what we want to show you today.

In this post, you’ll find some of the most important, influential, and interesting statistics about startups. Make sure you keep reading if you want to learn more!

Startup Statistics

Below, we’ve listed 20 startup statistics that will give you an improved knowledge and understanding of startups. By the end, you should know more in regard to what makes startups successful, what makes them unsuccessful, and what the startup industry currently looks like as a whole.

1. Every Year, Over 300 Million New Startups Are Created Worldwide

We’ll start with a mindblowing figure that shows just how popular startup businesses are. On average, approximately 305 million new startups are started globally. Despite hundreds of millions of startups forming every year, not all of them survive or make a profit.

It takes most businesses a long time before they become profitable, leading to many startups failing before they’ve even begun. Most startups spend their first few years in a phase people like to call “birthing pains”. This is the time the business spends finding its niche, building a strategy, and finding clients. 

The United States has the most new startups with over 70,000 startups being created every year. 

(Source: Earthweb)

2. Valued At $350 Billion, The Most Valuable Unicorn Startup In The World is ByteDance

Unicorn businesses are startups that are valued at more than $1 billion. The most valuable unicorn startup in the world is ByteDance. A tech company based in China, ByteDance is currently valued at more than $350 billion. 

A large part of the company’s success is down to its hugely popular and successful social media app we all know as Tiktok. Most unicorn businesses play a key part in the global sharing economy, making quick gains in the process.

(Source: Statista)

3. Approximately 50% of Unicorn Businesses Are Found In The US

Almost 50% of all Unicorn startups are based in the United States. This is no surprise considering the United States has the most new startups every year. China sits in second place with 25% of worldwide Unicorn companies. 

After that, we have the United Kingdom and India which constantly battle for third place. These two countries have about 5% of new unicorn companies. That accounts for roughly 20 businesses each. 

(Source: Crunchbase)

4. 1 In 5 Startups Fail In Their First Year

Starting your very own startup isn’t easy. It takes a lot of hard work, knowledge, and even at times an element of luck. In fact, 1 in 5 new startups fail in their first year. 

The sad truth of the matter is that most startups aren’t needed. A lot of startups believe their product is the one the market needs when in reality, a lot of the time, it isn’t needed at all.

As a result, a lot of startups close within their first year. Some startups also fail because of other startups that outcompete them. Either way, the reason for failure is almost always financial.

This gives startup companies a 21% chance of failure in their first year. 

5. San Francisco Has The Highest Rank For Startups

Every year StartupBlink ranks every global startup city. They base their ranking system on quantity, quality, and overall business environment. The city of San Francisco in the United States currently leads the way nationally and globally. 

The city ranks much higher than any other city in the world. Whilst San Francisco has a score of 550.97, the city in second has a score of 217. The city in second place is New York. The only city in the top five that isn’t in America is London. London sits in third place with a score of 125.64.

(Source: StartupBlink)

6. Latvia Has The Highest Percentage of Adults Involved In Startups In Europe

Interestingly, in Europe, it is Latvia that has the highest rate of adults actively involved with new startups. 

Despite the United Kingdom sitting near the top of the industry for unicorn companies, Latvia leads the way with the number of adults that work in the industry. Approximately 15.1% of Latvians of working age are either founders or managers of startups or are in the process of starting their own. 

(Source: GEM)

7. Studies Show That 95% of Entrepreneurs That Create Startups Have A Bachelor’s Degree 

One of the misconceptions about startups is that we don’t need some form of higher level education to be successful. Whilst this may be believed by a lot of people, research suggests otherwise. In fact, studies have shown that education is absolutely essential.

Using Elon Musk and Mark Zuckerberg as examples, Serious Startups found that 95% of entrepreneurs involved in the creation of startups have at the very least a bachelor’s degree. This goes to show just how much knowledge is needed to create a successful startup.

(Source: Serious Startups)

8. Almost 69% of startups Started At Home

Ideas have to start somewhere right? Well, research shows that most startup ideas start at home. Almost 69% of startups take shape at home. In the beginning, most startups don’t have the funding, tools, or operations to start any other way.

However, this isn’t just a choice people make in the short term. A lot of startup businesses continue to operate from home well after starting up. Reports actually show that almost half of entrepreneurs decide to keep operating from home.

(Source: SmallBizTrends)

9. Russia Doesn’t Have Any Unicorn Companies

Despite being one of the largest countries in the world, Russia hasn’t produced any unicorn companies. As a result, Russia is actually the largest country in the world by GDP not to do so. 

The other nations in the world that sit amongst the highest GDP list that also don’t have any unicorn companies are Venezuela and Saudi Arabia. Large nations like Italy only produced their first unicorn company in 2022.

(Source: Hurun)

10. AI Startups Receive $24 Billion In Investment Every Year

One of the fastest-growing industries in the world is the artificial intelligence industry, also known as AI. This industry has grown so fast that it has seen incredible investment and growth in recent years. 

Between 2016 and 2020, AI funding increased by 327%. At the time of writing this post, Grammarly is the most valuable AI startup with an estimated worth of $13 billion. The increase in funding for AI startups now accounts for approximately $24 billion of investment every year.

(Source: Statista)

11. Less Than 1% of Kickstarter Campaigns Raise More Than $1 Million

One way startups get funding is through Kickstarter. To date, Kickstarter has helped fund more than 225,000 projects. Despite this significant number of projects being funded, less than 1% of them raised $1 million or more. That accounts for approximately 667 projects. 

Most Kickstarter campaigns raise between $1,000 and $10,000. This accounts for roughly 53% of all projects listed on the funding website. This goes to show that raising money for a startup isn’t easy, even when the tools to do so are right there. 

(Source: Kickstarter)

12. U.S Healthcare Startups Were Amongst The Most Successful

In recent years, healthcare startups have proved to be some of the most successful in the United States. In 2017, healthcare startups in the United States were actually the strongest industry to be involved in. During that year, the industry brought in $36.3 billion dollars of revenue. 

The total number of healthcare startups also surpassed 5,000. Today, the tech and gaming industries are becoming more popular instead. 

That doesn’t mean the health industry isn’t still very lucrative for startups. 

(Source: Inc)

13. 58% of Startups Have Less Than $25,000 To Use When They Start

A fantastic statistic that shows how financial restrictions can be an issue for startups is that 58% of startups have less than $25,000 at their disposal when they startup.

For businesses to be successful, money is key. To innovate, grow, and market products, a startup needs money. The more money the business has to start with, the more it can do in the startup phase. 

This is one of the biggest reasons why startups fail. As if that figure didn’t make things tough enough for businesses, 33% of startup firms start with less than $10,000 of capital. 

(Source: Findstack)

14. Just 40% of Startups Become Profitable

One statistic that shows how successful startups can be is this one. Despite more startups failing than being profitable, 40% of startups still go on to become profitable. There are many things involved in guaranteeing a startup is successful and this 40% of startups show that they got it right.

Aside from offering a great product by operating a solid business strategy, startups must also manage legal, organizational, and logistics issues well. 

These types of issues lead to 30% of startups losing profit, whilst the other 30% of startups lose money straight from the start.

(Source: Findstack)

15. Almost 45% of Entrepreneurs Worry About Failing With Their Startup

Arguably a result of damning startup statistics, 43% of startup entrepreneurs in the United States fear failure. Considering entrepreneurs are well known for their ability to take risks, this isn’t a pretty statistic. 

It shows that almost half of startup entrepreneurs in America worry about their business failing. However, this isn’t as high as in other nations. Take the United Kingdom for example. In the United Kingdom, 52% of entrepreneurs fear failure. In Japan, 48% of entrepreneurs also fear failure. 

A nation that fears failure less than the US is Germany. 38% of entrepreneurs in Germany fear startup failure.

(Source: GEM)

16. ¾ of New Startups Used Their Personal Savings To Fund The Development of Their Startup

A whopping ¾ of new startups admitted to using their own personal savings to kickstart their startup company. This incredible statistic shows just how hard it is for startups to get the funding they need. Without their own savings, most entrepreneurs simply wouldn’t be able to start their own businesses.

The main reason for this lack of investment is simply down to the fact that most investors don’t want to take the risk on new startups. Before making an investment, most investors want to see a startup make money first. 

Using their own money to get their startup going is something most entrepreneurs have to be prepared to do.

(Source: Quickbooks)

17. Most Startup Companies Need An Annual Revenue of $50,000 To Stay Sustainable

It takes most companies approximately 2 years of operation before they become profitable. There’s no hiding from the fact that building revenue takes a lot of time. As a result, finding the right investment can be key to a startup’s future success. On top of that, companies need to hit certain revenue targets to stay sustainable.

Whether it be through crowdfunding, family and friends, investors, or loans, most startups need to make an annual revenue of at least $50,000 to stay sustainable. Without that revenue, most startups would become unsustainable. 

(Source: Quickbooks)

18. Entrepreneurs With Previous Experience of Failing Have A Greater Chance of Success

An interesting study recently found that startup founders that have previously failed have a 20% chance of success in the future. This is a greater chance of success than first-time founders that have never created a startup before. 

First-time startup founders have an 18% chance of succeeding. Whilst the difference between the two is very small, this does somewhat suggest that experience in the industry is valuable. 

Those with more experience can learn from their mistakes and ensure they don’t happen again.

(Source: Skill vs. Luck In Entrepreneurship and VC)

19. Failure Is Most Common Between Years 2 and 5

The penultimate statistic on this list is that 70% of startups fail between years two and five of operation. 

To some, this statistic may come as a surprise because a lot of people assume startups fail a lot sooner. A lot of people also don’t consider a five-year-old business to still be a startup either. However, businesses that are making millions of dollars a year and have been for 5 years+ can still be called a startup.

The main reason for this failure is a lack of funds. A lot of the time, startups run out of personal money. 

(Source: Failory)

20. Only 1% of Startups Evolve Into Unicorn Companies

Earlier in this post, we mentioned unicorn companies. Just to refresh your memory, unicorn companies are startups that are valued at $1 billion or more. In the world of startups, approximately 1% of companies become unicorn companies.

Popular startup companies that became unicorn companies are Slack, Airbnb, Uber, Docker, and Stripe. Who knows, your startup might be the next company to make the 1%.

(Source: CBInsights)

Frequently Asked Questions

What Is A Good User Growth For Startups?

This varies from industry to industry, but generally speaking, a good growth rate for any startup is 20 to 30% per year. However, some startups far exceed this. For example, some tech startups experience growth rates of 50 to 100% per year.

What Percentage of Startups Have Successful Exits?

In the long term, new startups have a success rate of approximately 10 to 20%. However, this success is determined by a number of factors. For example, owner qualifications, experience, funding, and reach all play a part. 

How Long Do Startups Last?

The time most startups last isn’t too great. On average, most startups will last between 2 and 5 years. Having said that, there is a very high percentage of startups that don’t even make it out of their first year.

Startups that last more than 5 years typically become market disturbers. This often leads to them making many millions of dollars. 

Final Thoughts

There you have it, a comprehensive list of startup statistics. As you can see from this post, creating a startup isn’t easy. Startup statistics show that most companies fail within the first few years of operating. Having said that, studies have also shown that startups can bring much success, often becoming some of the biggest companies in the world.

Whether you’re keen on the topic or dream of one day creating your very own startup, the statistics in this post will come in useful. We’ve looked at everything from the fastest-growing industries and profitable startups to startup failure statistics and worldwide figures.

Now you have this list at your fingertips, you should have a much better understanding of the startup industry and what it might take to be successful.