Top 15 Insightful Startup Statistics To Look For In 2022 | by Aysha Saifi | The Capital | Jul, 2022

To stay current on industry trends, we’ve accumulated small company and startup statistics to help you better grasp what it’s truly like to start a firm. Are you exploring starting a business, or are simply curious about what to learn from startup statistics? In this article, we look at insightful numbers, informative startup facts, and statistics about success, failure, trends, and more to help prepare you before you start a business.

To succeed in business, you need to know all of the global startup statistics facts and not just hear about people’s success experiences. Rather than keep this knowledge to ourselves, we’ve opted to make it available to you in the hopes that it may aid in your understanding of the startup community in general.

More and more startups are rising up as a result of technological advancements, the ability to outsource work to remote teams, and the widespread usage of digital solutions in our daily lives. The major economic engine has always been new business ideas.

It doesn’t matter if you already have a business or are just starting out; understanding what’s going on in this sector is important. An understanding of the market, ideas for new products, and interesting conclusions can all be gained from startup statistics, which are essential to getting your startup on a good track.

We’ve compiled a list of stats, facts, and trends that will help you better understand the startup industry.

1. General statistics:

• In 2021, the US had 32.5 million registered small companies (SBA)
• In 2015, startups created over 2 million employees in the US (U.S. Census Bureau)
• Only 40% of new businesses succeed. Another 30% of startups will fail, and the other 30% will continue to lose money. (SMB Trends)
• 67% of pre-Series A companies generated revenue in 2017, up from just 11% in 2010. (TechCrunch)
• In the US, 79.7% of startups have only one employee. (NASE)
• In general, startups spend around 11% of their sales on marketing. (Hubspot)
• Validating a business model takes 2–3 times longer than expected. (Forbes)
• In 2020, there will be 475 “unicorns” worth $1.394 trillion. (CB)
• In the US, almost 69% of entrepreneurs started at home. (SMB Trends)
• The time of year you pitch, the detail of your data, and the value of your pitch deck all impact how much money a company receives. (Forbes)
• Starting a business in America takes only six days. (Dynado)
• 66% of small enterprises will outsource services. (FreshBooks)
• Homeowners are 10% more likely than non-homeowners to start a business (U.S. Small Business Administration)
• 81% of US SMB owners work overtime. (Fortunly)
• 13.5% of worldwide startup deals are in San Francisco and Silicon Valley. (StartupsUSA)
• Only 1.3% of natives in Japan are entrepreneurs. (Entrepreneur)

2. Worldwide startup industry:

• Fintech accounts for 7.1% of all startups globally.
• Following that, life sciences and healthcare accounted for 6.8%, artificial intelligence accounted for 5.0%, gaming accounted for 4.7%, adtech accounted for 3.3%, and education accounted for 2.8%.
• While sector distribution data is not totally precise, it is apparent that current entrepreneurs lean toward the internet and digital technology.
• Additionally, we can use this data to determine which industries are the best for startups at the moment.

3. Unicorn startups by valuation:

• ANT Group is the world’s most valuable unicorn, valued at over $125 billion. (Statista)
• The term “unicorn” is used in the entrepreneurial community to refer to privately held startup enterprises worth more than $1 billion. When the phrase was developed in 2013, just 39 software companies in the United States were valued at more than $1 billion.
• Today, there are approximately 500 unicorns, the majority of them situated in the United States and China. The top unicorn in the world is ANT Group, a subsidiary of Alibaba Group. According to 2020 startup data, ByteDance is ranked second with a $75 billion valuation.

4. Startup success:

• Small business survival rates in America (Fundera):
• Around 80% of small firms survive their first year.
• Around 70% of small firms survive their second year.
• Around 50% of small firms survive their fifth year.
• Around 30% of small enterprises will survive 10 years.
• Founders of past successful enterprises have a 30% likelihood of success. (Skill vs. Luck in VC)
• Even with little funds, 82% of successful business owners admit they have the qualifications and experience to run a company. (SMB Trends)
• Customers are vital since 14% of startups fail because they ignore their demands. (Fundera)
• The greatest obstacle to a startup’s success is a new business. (Statista)
• Founders who have previously failed have a 20% likelihood of success, while first-time founders have an 18% chance. (Skill vs. Luck in VC)
• In 2017, along with Inc. 5000 firms, healthcare startups generated $36.3 billion in revenue. (Inc.)

5. Startup failure:

• According to statistics, 90% of startups fail. (Failory)
• In 42% of situations, startups fail because of misreading market demand. (CBInsights)
• The second most common reason for startup failure (29%) is lack of capital. (CBInsights)
• Other reasons for failure include a subpar founding team (23%), and competition (19% ). (CBInsights)
• A year-old startup fails 10% of the time. (Failory)
• Startups fail 70% of the time between years two and five. (Failory)
• Competition usually causes a startup’s demise after three to five years. (Failory)
• Across industries, startup failure rates appear to be similar. (SBA)
• Pricing/cost concerns, unusable products, bad marketing, and product mistiming are all important factors for company failure (at least 10%). (CBInsights)
• In 2018, 82% of firms failed due to cash flow issues. (Fundera)

6. Startup growth:

• Companies that spent more on sales and marketing grew faster than those that spent less. (For entrepreneurs)
• In their first five years, SaaS companies spend between 80% and 120% of their revenue on sales and marketing. (Tunguz)
• Even a 60% yearly growth software firm has a 50% chance of becoming a multi-billion dollar powerhouse. (McKinsey)
• Unlike other industries, a software business that grows at only 20% has a 92% chance of dying within a few years. (McKinsey)
• Growth firms return 5 times more to stockholders than medium-growth enterprises. (McKinsey)

7. US unicorn startups:

• Venture capital is already thriving until 2020, with 66 new firms joining this exclusive group in the last six months. There are now more unicorn startups worldwide, with a combined valuation of little under $2 trillion.
• The United States has maintained its leadership position in unicorn ownership, accounting for slightly more than half of all unicorns (51% ).
• The United States is home to 489 unicorns. This is a comprehensive list of all Unicorns based in the United States.

8. Highest investment startups:

There is no one-size-fits-all when it comes to new businesses. Entrepreneurs come up with a variety of concepts, target markets, products, and services when they begin their businesses. However, they all follow the same startup model regardless of the industry in which they operate. With its advent and performance, here is the list of high invested startups:

• Healthcare with $41.2 Billion followed by.
• Transportation with $25.2 Billion,
• Financial services $24.6 Billion
• Artificial Intelligence by $16.0 Billion and
• E-Commerce by $13.5 Billion.

9. Startup funding:

• In 2018, venture capital-backed less than 6% of all new US enterprises. (Kauffman)
• The Series A round is usually the third round. (TechCrunch)
• The average seed capital raised was $5.6 million before Series A. (TechCrunch)
• Series A rounds average $15.7 million, Series B $30.7 million, and Series C $55 million. (Fundz)
• It takes an average of 22 months from Seed to Series A, 24 months from Series A to B, and 27 months from Series B to C. (Carta)
• After a Series, B, or C round, expect to work for 15 to 20 months before raising further financing. (Forbes)
• Each year, individual venture capital firms get over 1,000 applications, with most requiring a minimum investment of $250,000. (Bank Robbers)
• 33% of employer beginning capital is under $10,000. 2017 SBA
• 12% of employer beginning capital is $250,000 or more. 2017 SBA
• In 2017, $155 billion was invested in venture capital. (KPMG)
• Uber, Airbnb, Slack, Stripe, and Docker are all unicorn startups. (CBInsights)
• Male founders raised $109.36 billion in VC in 2018, whereas female founders only raised $2.86 billion. (PitchBook)
• In March 2019, Bytedance, a Beijing-based news and information platform, was valued at $75 billion by venture capital firms globally. (Statista)

10. Startup cost:

• While your startup expenses will vary depending on your location, our statistics can help you estimate what you may need to get started.
• Over 47% of Series A startups spend over $400,000 monthly. (Fundz)
• An estimated $300,500 for five personnel is one of the most costly startup fees (Smart Asset)
• In 2018, personal money accounted for 77% of launch expenditures. (Lendio 2018)
• Large unicorn businesses like Airbnb and Uber have taken on billion-dollar debt to grow. (PitchBook)
• Startup equipment expenditures might range from $10,000 to $125,000. (Fundera)
• The median income for an entrepreneur is $59,000. (Finances.com)
• According to recent data, restaurants, medical offices, and industrial industries are the most expensive small businesses to start. (SMB Trends)
• Recent research found that accounting, online retail, construction, and gardening were the most likely to start with less than $5,000. (SMB Trends)
• The expense of health insurance is one of the biggest threats to small businesses and startups. (NSBA)

11. Startup team:

• Despite often harsh circumstances, startups thrive on founders’ and early employees’ complementary abilities. Before you form your own startup team, have a look at the facts below.
• Founder teams outperformed individual founders by 163% (First Round Capital)
• Over 95% of US firms are small (less than 500 employees). (SBA)
• A startup hires someone in six months on average. (Forbes)
• Startup teams with lots of experience but little passion and vision were weaker. (HBR)
• Startup entrepreneurs can spend up to 40% of their time on non-profitable processes like hiring, HR, and payroll. (Entrepreneur)
• Startups fail most frequently with 11–50 people. (Failory)
• Two founders enhance a startup’s chances of success by 30%, triple the rate of client growth, and reduce the risk of over-scaling. (SMB Trends)
• Only 50% of employee-owned enterprises survive the first five years.
• 23% of startups failed due to team difficulties. (Entrepreneur)
• Soft qualities like “entrepreneurial passion” and “shared strategic vision” are essential in addition to experience. (HBR)

12. Fintech startups:

• 39 VC-backed fintech unicorns worth $147.37 billion. (CB)
• This market is expected to reach $460 billion by 2025. (GlobeNewsWire)
• Currently, 46% of consumers only use digital channels for personal banking. (Singularity)
• About 30% of consumers plan to utilize non-traditional financial services providers more, but just 39% plan to use only traditional suppliers. (ICBA)
• 88% of legacy banks fear losing revenue in areas like payments, money transfers, and personal loans to financial technology startups. (PwC)
• A massive 82% of traditional banks think they will collaborate more with fintech companies in the next three to five years. (PwC)

13. E-commerce startup:

• Globally, eCommerce sales are estimated at $3.5 trillion, with rapid future development.
• That’s why eCommerce is a hot industry for new businesses.
• In e-commerce and direct-to-consumer, the top slot belongs to Xiaohongshu ($20 million, November 2021), a social e-commerce app located in China.
• After suspending plans to go public, the company just secured a $500 million Series E round from Alibaba, Tencent, and other investors.

14. Startup profitability:

• A recent poll found that over 78% of small firms profited. (Guidant Financial)
• Small business profitability has risen to its greatest level in four years. A good economy has helped small business owners sleep better and make more money. On a scale of 1 to 10, entrepreneurs surveyed by Guidant averaged 8 out of 10, with 53% scoring 9 or above.

15. The startup that secures venture capital:

• 77% of small firms receive their initial funding from personal resources.
• A third of small firms begin with a capital investment of less than $5,000.
• Approximately $10,000 in startup financing is required for the average small firm.
• Venture money is raised by less than 0.05% of startups.
• A typical seed round is worth $2.2 million.
• The median company raising initial capital is three years old.
• 1% of firms that got seed funding achieved unicorn status, with a valuation of $1 billion or more valuation.
• Startups with two co-founders, as opposed to one, raise 30% more money.

Are you considering starting your own business? Whatever your objectives are — whether to create a new enterprise, locate a co-founder, or raise a new round of financing — staying current on the newest statistics in each startup category is an excellent approach to keeping educated and making sound business decisions.

Thanks to a record low jobless rate, we have the world’s most competitive and inventive market. Startup growth and success statistics suggest that you can certainly succeed with the appropriate skills, strong organization, and a little luck.

It is our hope that these figures and trends will help you prosper in your order for businesses. The startup industry will be a major force behind global innovation and economic expansion for many more years to come. As a result, businesses must learn how to adapt to current trends while maintaining their long-term survival.