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Startup Failure Rate and 80+ Other Startling Statistics About Startups

A great piece of research on startup statistics and trends:
Some highlights:

Startup Failure Rate Statistics

  • Incompetence, at 46%, is the most common reason why businesses fail, according to a Statistic Brain study.
  • The percentage of startups that fail after four years in the U.S. is over 50%.
    • CJ Note: see the details – so you can avoid the cliched, and incorrect meme: “90% of all startups fail”
  • 65% of entrepreneurs admit they were not fully confident they had enough money to start their business.
  • Of the startups surveyed, 58% started with less than $25,000 and one-third started with less than $5,000.
  • 71% of surveyed U.S. startups have successfully raised capital in 2018.
  • In 2019, 52% of U.S. startups expect their company’s next source of funding will be venture capital.
  • San Francisco and Silicon Valley account for 13.5% of global startup deals.

For more interesting facts and statistics about the startup landscape in 2019, check out SmallBizGenius’ comprehensive study and infographic.

Some highlights below:

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To get new startup ideas off the ground, aspiring business owners are faced with many options for funding, including bootstrapping (self-financing) their venture, taking out a short term business loan, or tapping into the boom of cryptocurrency by launching an ICO to raise capital.

An ICO gives companies the funds they need to operate by selling underlying crypto tokens in exchange for another form of cryptocurrency. Short for Initial Coin Offering, this method of raising business capital is allows startups to retain control of their companies and has little regulation, allowing entrepreneurs to see a significant ROI without facing red tape or restrictions.

Still, entrepreneurs should bear in mind potential disadvantages that come with ICOs, specifically that they bear significant risk of failure and can be expensive to launch. Small business owners should carefully consider the advantages and disadvantages that come with using an ICO to raise business capital.

To learn more about using an ICO to fund a new business venture, check out the infographic from Fundera below.

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Every entrepreneur dreams that their business will be one of the ones that make it big. For a few very lucky start-up founders, this dream has become a reality and their ventures have truly hit the big leagues by earning a coveted spot in the so-called Unicorn Club. This is a very small number of privately held start-ups that are now valued at a billion dollars or more. Many of the big names will be very familiar to you, with household names like Uber, Airbnb, Pinterest, and Reddit all part of this exclusive club.

In this article, we’re going to look at the secrets to billion dollar startup success. What do these companies have in common – and what don’t they? How can another business replicate their success? Keep reading to find out…

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Understanding the Startup Valuation Process (Infographic)

(special thanks to … Redwood Valuation Partners)

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For entrepreneurs, securing venture capital is a grueling and frustrating process. Even if you have the most promising venture in history, the likelihood of being offered a term sheet is determined by a mysterious series of steps. Until now. Here’s your guide to what happens behind the scenes, when venture capitalists decide whether to invest:

(read it on Medium : The Secret VC Decision Process — Exposed)

 

 

Look-Back-at-Startup-Funding-by-Fundable-ThumbnailHere’s an interesting infographic that really does a good job of illustrating how startups receive their initial (external) funding.

The specific data is from 2014/2015 – it is really timeless. First time entrepreneurs should really take a hard look at the sources of funding to decide where they want to focus their time and energy.  While I take issue that the data mixes “”small business” and “entrepreneurial startup”, the chart does indeed provide a concise view of where the funding comes from, and where it flows.

A special shoutout to Arizona’s Desert Angels who is featured as one of the nation’s top investors in startup companies.

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startups_by_the_numbers-thumbSome interesting “numbers” on “startups”.

The term ‘startup’ is used too broadly to have any meaning . Many of the numbers really apply to small businesses  – which is not synonymous with ‘startup’.

And, I hesitate to call these statistics or data because they are subject to much interpretation. For instance, this infographic perpetuates the meme that 50% of new businesses fail within 3 years. This is a gross generalization. 50% may not exist after 3 years, but this also may be due to other factors such as the owner retiring and closing the business.

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