What comes to mind when you hear the word startup? If it’s a grungy basement in the heart of Silicon Valley, you’re not alone. A large portion of people think of startups as a team of only five people with one common thread—a high threshold for chaos, but even a five-year-old company can still be considered a startup.

 

106 Must-Know Startup Statistics for 2020

Woman pointing to a large arrow that points upward. Illustration.
A rocket ship launching with steam underneath it. Illustration

What comes to mind when you hear the word startup?

If it’s a grungy basement in the heart of Silicon Valley, you’re not alone. A large portion of people think of startups as a team of only five people with one common thread—a high threshold for chaos, but even a five-year-old company can still be considered a startup.

A startup can graduate to a larger company by being acquired, opening more than one office, generating revenues greater than $20 million, or having more than 80 employees, Forbes explains.

These employees work for entrepreneurs who believe their ideas could skyrocket by creating a startup. Well that’s the dream, right? The risky reality when it comes to startups is that they’re vulnerable to risk and likely more than we would imagine. On the bright side, 10% of startups are successful each year and know what it takes to survive the odds of failing.

During the beginning stages of a startup, finding where seed funding will come in from is more than half the work. Your initial funding will most likely come from your own pockets and then the goal is outside funding.

To track the latest trends, we’ve compiled small business and startup statistics to better understand what makes a startup tick. If you’re looking to build a startup or just interested in diving into the numbers, check out these informative statistics on success, failure, funding and more before getting started.

01

Startup Statistics and Trends

02

Startup Success Rates

03

Startup Failure Rates

04

Startup Funding + Investor Facts

05

Startup Costs Statistics

06

A Look at Startup Teams

07

Statistics for FinTech Startups

08

Statistics for Construction Startups

09

Statistics for Technology Startups

10

Statistics for Real Estate Startups

11

Future of Startups

12

The Experts’ Opinions

01

Startup Statistics and Trends

A group of people talking together. Illustration.

The average time between funding rounds from Seed to Series A is 22 months, Series A to B is 24 months, and Series B to Series C is 27 months.

Carta

47% of Series A startups spend $400k or more per month.

Fundz

The average funding amount for a Series C round is $50 million.

Fundz

Once you get to a Series B or C round, you’ll probably work for 15 to 20 months before bringing in new capital.

Forbes A blank calendar. Illustration.

In 2015, startups created over 2 million jobs in the U.S. alone.

U.S. Census Bureau

In 2018, there were 30.2 million small businesses operating in the U.S.

SBA

Companies raise nearly three rounds before they get to Series A funding.

TechCrunch

95% of entrepreneurs have at least a bachelor’s degree.

Ewing Marion Kauffman Foundation

Only 2 in 5 startups are profitable, and other startups will either break even (1 in 3) or continue to lose money (1 in 3).

Small Business Trends

67% of Series A funded startups in 2017 were already generating revenue before being funded.

TechCrunch

The average Series A in 2010 was $4.9 million. By 2017, it reached $12.1 million.

TechCrunch

A 2018 study shows that a 60 year old is 3x as likely to build a successful startup than a 30 year old.

Kellogg Insight

In 2018, there were 145 “active unicorns” in the U.S. collectively worth $555.9 billion.

TechCrunch

In 2016, 69% of U.S. entrepreneurs started their business at home.

Small Business Trends

The ratio of men entrepreneurs to women entrepreneurs in 2019 is 10:7.

Global Entrepreneurship Monitor

The time of year you pitch, the detailedness of your data, and the value of your pitch deck are a few of the strongest factors affecting the amount of funding a business receives.

Forbes

It only takes six days to start a business in the United States.

Dynado

66% of small businesses will outsource services to other small businesses.

FreshBooks
02

Startup Success Rates

A person hanging an oversized sign that says Open. Illustration

The highest five-year survival rate for new businesses is mining, at 51.3%.

US Census Bureau Mine carts going into a mine on a mountain. Illustration

Founders of a previously successful business have a 30% chance of success with their next venture.

Skill vs. Luck in Entrepreneurship and VC

82% of successful business owners admit they have the right qualifications and backed up experience to run a company, even with limited cash flow.

Small Business Trends

Paying attention to your customers is important since 14% of startups fail due to not regarding customers’ needs.

Fundera

The main challenge to the success of a startup is generating new business.

Statista

Founders who have failed previously have a 20% chance of success while first time first time founders have an 18% chance of success.

Skill vs. Luck in Entrepreneurship and VC

In 2017, U.S. healthcare startups were the strongest industry, bringing in $36.3 billion in revenue along with Inc. 5000 companies.

Inc. A tall hospital building with a red cross. Illustration.
03

Startup Failure Rates

A person packing their office belongings into boxes. Illustration.

About 90% of startups fail.

Failory

10% of startups fail within the first year.

Failory

Across all industries, startup failure rates seem to be close to the same.

SBA

Failure is most common for startups during years two through five, with 70% falling into this category.

Failory

The number one reason why startups fail is due to misreading market demand — this is found in 42% of cases.

CBInsights Towers of boxes full of unused products. Illustration

The second largest reason why startups fail (29% of cases) is due to running out of funding and personal money.

CBInsights A hand holding a paperclip, string, and a penny. Illustration

Other notable cases of failure are a weak founding team (23%) and being beat by competition (19%).

CBInsights

Failure because of competition most likely happens when a startup has been active for three to five years.

Failory

Other major reasons for startup failures (at least 10% or above) are from pricing/cost issues, user-unfriendly products, poor marketing, and product mistiming.

CBInsights

In 2018, 82% of businesses that went under did so because of cash flow problems.

Fundera
04

Startup Funding + Investor Facts

A person putting money into a gigantic piggy bank. Illustration.

Individual venture capital firms receive more than 1,000 proposals a year and are mostly interested in businesses that require an investment of at least $250,000.

Money Crashers An arm holding a spiral notebook. Illustration

33% of startup capital for employer firms is less than $10,000.

SBA 2017

12% of startup capital for employer firms is $250,000 or more.

SBA 2017

Venture capital funding reached a decade-high of $155 billion in 2017.

KPMG

About 1% of startups evolve into a unicorn startup, like Uber, Airbnb, Slack, Stripe, and Docker.

CBInsights

In 2018, male founders brought in $109.36 billion in VC, while female founders only brought in $2.86 billion in VC.

PitchBook

Valued at $75 billion, Bytedance, a Beijing-based news and information content platform, was the top valued startup by venture capital firms worldwide in March 2019.

Statista

One in four businesses, surveyed by the NSBA, were not able to receive the funding they required, which led to limiting the growth of their business.

Fundera

1 in 3 begin their small business with less than $5,000.

Small Business Trends

Business loans, credit cards, and lines of credit account for about ¾ of financing for new firms.

SBA A credit card and a loan certificate. Illustration.
05

Startup Costs Statistics

A long receipt showing business expenses. Illustration.

One of the most expensive startup costs is payroll, averaging around $300,500 for five employees across the U.S. according to data from

Smart Asset

The most popular financing method for startups costs in 2018 was personal funds at 77%.

Lendio 2018 survey A wallet with paper money sticking out. Illustration.

Large unicorn startups, such as Airbnb and Uber, have taken a billion dollars or more in debt in order to become more successful.

PitchBook

Equipment costs for startups can range anywhere from $10,000 to $125,000.

Fundera A brand new laptop. Illustration.

With costs being so large and detrimental to a startup’s survival, the median salary for self-employed individuals was $50,347 in 2016.

SBA

Recent research has shown the most expensive small businesses and startups to launch are restaurants, medical offices, and manufacturing companies, needing more than $100,000 to get started.

Small Business Trends

Startups in accounting, online retail, construction, and landscaping were most likely to get started with under $5,000 in startup costs, shown in recent research.

Small Business Trends

One of the biggest challenges to the survival of small businesses and startups is the cost of health insurance.

NSBA
06

A Look at Startup Teams

A team of coworkers gathered around a whiteboard. Illustration.

Over 99% of U.S. businesses are considered small (less than 500 employees).

SBA

On average, it takes six months to hire someone for a startup.

Forbes

Startup teams that reported high levels of previous experience but average to low levels of passion and collective vision were overall weaker.

Harvard Business Review

Startup owners can spend around 40% of their working hours on tasks that do not generate income such as hiring, HR tasks, and payroll.

Entrepreneur A person sitting at their desk in from of a computer. Illustration

Startup failure is most common when the company has 11–50 employees.

Failory

Two founders increase the odds of a startup’s success with 30% more investment, three times the customer growth rate, and a higher likelihood the startup will not scale too fast.

Small Business Trends

23% of startups mentioned team issues leading to failure.

Entrepreneur

Experience alone does not make a team successful — soft skills such as “entrepreneurial passion” and “shared strategic vision” are required as well.

Harvard Business Review

Over 50% of small businesses have a Chief Financial Officer.

Wall Street Journal
07

Statistics for FinTech Startups

A giant smartphone next to a bank with coins around it. Illustration.

In the first three quarters of 2018, both blockchain and cryptocurrency-focused startups have raised close to $3.9 billion in venture capital, which is up 280% compared to 2017.

Diar A wallet and a coin. Illustration.

Research has shown that successful fintech startups will focus on data-driven iteration and continuous user testing, rather than using new technology.

McKinsey Panorama Report

In 2018, global venture capital fintech investment reached $30.8 billion, which is an increase of $1.8 billion from 2011.

McKinsey Panorama Report

About 80% of financial institutions implemented a fintech partnership.

McKinsey Panorama Report

In 2018, the average investment into cryptocurrency and blockchain increased by over $1 million.

Coindesk

Worldwide, there are more than 12,000 fintech startups and 5,779 in the U.S. This makes the U.S. the most popular place for fintech startups as of August 2018.

Statista A laptop with a picture of a coin on the screen. Illustration.

The fintech market includes 39 venture capital backed unicorns worth a combined $147.37 billion.

CB Insights

In 2017, blockchain firms saw record levels of VC investment and deal volume, at a record high of $512 million.

KPMG

Five new fintech unicorns developed in the fourth quarter of 2018 and two additional unicorns in January of 2019.

CB Insights

VC investment into U.S.-based blockchain fintech projects in the first half of 2018 was far greater than all of 2017.

KPMG

The largest challenge that fintech startups face is the cost of customer acquisition.

McKinsey Panorama Report
08

Statistics for Construction Startups

A large tractor. Illustration.

Construction had the second highest failure rate (53%) as of 2018.

Failory A crane moving blocks to build a building. Illustration.

In North America, construction startups brought in $581.6 million in funding in 2017 compared to $182.7 million in 2013.

Crunchbase

Investors contributed to 87 construction startup deals last year.

Crunchbase

One of the now monster startups, Katerra, brought in $865 million in a Series D round.

Crunchbase

The construction industry is among the least digitized.

McKinsey & Co. 2016 study

The likelihood that a new construction company will last more than five years is 36.4%.

Small Business Trends

Good news for construction startups, AI technology is estimated to boost profits by 71% for this industry.

Accenture

Residential housing construction is growing faster than any construction segment, as new business is seen entering this sector.

Tradesmen International

Electric utilities construction is approximated to slide by 9%.

Tradesmen International
09

Statistics for Technology Startups

Corworkers standing and sitting around oversized computer screens. Illustration.

The average age of tech startup founders is 39.

Ewing Marion Kauffman Foundation

The U.S. is the largest tech market in the world, coming in at $1.6 trillion in 2019.

CompTIA

The United States averages 20 technology companies founded per year that reach $100 million in revenues.

Ewing Marion Kauffman Foundation

As of 2018, the tech startup industry has the highest startup business failure rate, at 63%.

Failory

Tech-based wage growth was higher than over the U.S. wage growth from 2007 to 2016, 20% versus 3%.

ITIF

There are ten technology-based industries that define a tech-drive startup including: pharmaceutical manufacturers, medical device manufacturers, computer and electronic manufacturers, and semiconductor machinery manufacturers.

ITIF

Computer and electronics manufacturing startups have boosted by 78% from 2007 to 2016.

ITIF Laptops on a factory converyor belt. Illustration

Tech-driven ventures offer better pay opportunities, as they pay an average of $102,000 more than double the current U.S. average of $48,000.

Forbes
10

Statistics for Real Estate Startups

A realtor hands a for-sale sign near a home. Illustration

Real estate startups have raised $1.9 billion in 2019.

Crunchbase

Proptech (property technology) startups are on the rise, with 255 starting in 2014.

Statista

Residential real estate startups using artificial intelligence tools are bringing in the most investments, such as REX ($45 million), Knock ($400 million), and ZIllow ($565 million).

Housingwire

VCs have sunk substantial funds into office sharing startups like Industrious, which raised $62 million in 2017.

inman

The top type of real estate asset that proptech startup CEOs have chosen to pay attention to is commercial property.

Statista A tall commercial skyscraper. Illustration.

A large number of small businesses and startups are beginning to support real estate agents and other professionals within the industry.

inman Three map pins. Illustration.

Over $13 billion were invested in various proptech companies worldwide In 2017, $13 billion was invested within various worldly proptech companies.

Statista

The number of real estate tech deals worldwide has increased consistently each year, amounting to 454 deals as of 2018.

Statista

About 31% of commercial real estate investors plan on investing in proptech companies and 26% plan on partnering with protech companies.

Statista
11

Future of Startups

A person looking through an oversized telescope. Illustration

Startup founders are leaving the Silicon Valley “bubble” and heading to the East coast.

The Wall Street Journal A map of the united states with an arrow pointing from California to New York. Illustration.

Unicorns are much more common and trending to be even more common. The rate has increased by 353.1% from 2013 to 2018.

PitchBook

To solve problems across various startup industries, new technology will be implemented.

Entrepreneur

Recognize that personalized marketing will become important to the success of your startup.

Startupbasics

2019 is the year where startups will turn heavily towards technology to assist with keeping up with their books and avoiding financial distresses.

Rob Rosenblatt to Small Business Trends

Startup subscription boxes that are related to food, beauty products, apparel, and lifestyle will continue to be popular.

Startupbasics A box of fruits and vegetables

More and more startups will begin to collaborate and become open to partnerships.

Startupbasics

Within the next few years, we will see more entrepreneurs that have recently graduated from college.

Entrepreneur

The new customer success role will become a data engineering role.

LinkedIn
12

The Experts’ Opinions

Two experts speaking with each other. Illustration.

According to respondents of Small Business Trends survey, the best way to learn more about entrepreneurship is to start a company.

Small Business Trends

Asses all potential bottlenecks apart from the competition. Make sure your team is experienced enough and that you are aware of all small threats, which could lead to a larger threat.

Failory

Research businesses similar to you that have been active for longer than five years.

Failory

When building your team, look for your business’s weak spots to identify the skill sets required to satisfy your company’s needs.

Founder Institute A person holding a clipboard with a checklist. Illustration.

“The secret to successful hiring is this: look for the people who want to change the world.”

Marc Benioff, CEO of Salesforce

92% of business owners believe that having a website is the most effective digital marketing strategy.

Iron Paper A computer screen showing a company website. Illustration.

"Chase the vision, not the money; the money will end up following you."

Tony Hsieh, CEO of Zappos

Forbes mentions the criteria for a successful startup, “They have a product that meets a need, they don’t ignore anything, they grow fast, and they recover from the hard-knock startup life”.

Forbes

The most valuable thing you can do as a founder is recognizing your downfalls beforehand and learning from other businesses’ failures. Apply this knowledge to starting your own startup.

Failory
A key and a lock hole. Illustration.

Despite the startup failure rate, learning from your mistakes in business and the mistakes of others is the key to startup success and survival. Appreciate the competition, know where you stand, and take note of all startup trends in order to be at the top of your startup’s industry.

One more important reminder, always be protected. You are most vulnerable to digging too heavily in your own pockets when starting a business. Have your company enroll in startup insurance to keep you and your team safe with custom coverage built for growth.