40 Staggering Startup Statistics Everyone Should Know in 2021

Are you considering starting your own business? The idea of being your own boss is certainly a tempting one. Unfortunately, many people underestimate how difficult it can be to run a successful business.

That’s one of the reasons we’ve created this page. We’ve compiled an extensive list of startup statistics so that you can make an informed decision about whether or not this is the right move for you. We wanted you to have all the facts at your disposal.

We’ve scoured reputable sites for the facts and figures. So shelve those preconceived notions—much of the commonly held wisdom regarding new businesses isn’t entirely correct.

Startup Statistics for 2021 – Editor’s Choice

  • Around 37% of startups fail due to a lack of capital or profitability.
  • 77% of startup founders said they faced potential failure in 2020 due to Covid-19.
  • 4.4 million new companies started operating in 2020.
  • Impact-driven founders are the most successful.
  • China accounts for the largest number of patents held worldwide.
  • 36% of the workers in the United States are freelancers.
  • Sixty-six venture capital-backed companies joined the ranks of “unicorn” in 2020.
  • 75% of the startups backed by venture capitalists fail.
  • Artificial intelligence startup funding grew to $8.2 billion in 2020.
  • Quibi Holdings LLC is the costliest startup failure of all time, with a loss of $1.75 billion.

General Startup Statistics

1. China and the United States account for most of the highest value startups.

(Source: Statista)

According to these startup statistics, these regions also have the highest levels of startup funding available. Entrepreneurs in these countries have ready access to alternative funding sources, such as venture capitalists, crowdfunding, and angel investors.

2. Venture capital funding in 2020 increased by 14% from 2019.

(Source: Bloomberg)

It could also be a result of crowdfunding platforms gaining more traction. The boom in the blockchain industry has significantly boosted their startup funds. This also includes private equity and debt investments. 

The year 2020 also saw an increase in megarounds, which are deals larger than $100 million despite the decrease in funding for young startups.

3. The robotics industry has grown by 1,400% over the last five years.

(Source: Statista)

Robotics and advanced manufacturing are two industries that have grown exponentially over the last five years. So if you’re looking for the best startup industries, these are the ones to keep in mind. Evidently, we’re moving into a phase where robotics are becoming a lot more important in day-to-day living.

4. Artificial intelligence startup funding grew to $8.2 billion in 2020.

(Source: insideBIGDATA)

Of course, with an increased interest in robotics, it makes sense that AI investment would show a significant increase as well despite the slight slow down last year due to the pandemic. Its practical application has also become more feasible, making it even more important to note the latest tech startup statistics and ideas. The advances in AI over the past few years have made it a valuable commodity.  

Global Statistics

5. The most active regions for startups are the Caribbean and Latin America.

(Source: Statista)

However, getting startup funding is more difficult in these regions. That’s why the United States and China have higher-value startups. Still, those in the Caribbean and Latin America have plenty of entrepreneurial spirits. According to startup statistics by country, about 33% of Ecuador’s population is involved with startups. In the States, only 13% of the population is.

6. Chile ranks as the top entrepreneurial country worldwide.

(Source: The Boss Magazine)

The country scored 76% as the best country to start a business in 2021 based on metrics such as innovation, funding, education, and fear of failure. As per the most recent global startup statistics, India and Guatemala follow with 69% and 67%, respectfully.

7. In Qatar, Indonesia, Thailand, Panama, Angola, and Madagascar, entrepreneurial activity is evenly spread between the two sexes.

(Source: GEM Global Entrepreneurship Monitor)

It may come as a surprise to Westerners that Qatar boasts an equal number of male and female entrepreneurs. The treatment of women in the Middle East may not be what most perceive.

8. New Zealand, Canada, and Hong Kong are the best places to open a business in 2021. 

(Source: City Telegraph)

The governments of these countries have attempted to remove as much red tape as possible. Therefore, the startup statistics show that creating a business in these countries is easier than in others.

9. Entrepreneurship has gotten a lot of media attention in South and East Asia. 

(Source: GEM Global Entrepreneurship Monitor)

As a result, entrepreneurial activity in these countries is higher. The media coverage showcases businesses, thereby demonstrating what steps would-be entrepreneurs should follow while also encouraging them.

10. Opportunities for entrepreneurs are considered the highest in the United States, Germany, and the United Kingdom.

(Source: CEOWORLD Magazine)

According to these startup stats from the CEOWORLD Magazine’s index for 2021, these countries are the top three best places to be entrepreneurs based on competitiveness, innovation, labor skills, infrastructure, access to capital, and business openness. 

11. Latin American entrepreneurs are the most fearless.

(Source: GEM Global Entrepreneurship Monitor)

Fewer than a third of these entrepreneurs would let the fear of failure stand in their way if they saw a business opportunity. As for other countries, startup failure rate statistics indicate that only 17% of Angolans would put off starting a business due to fear of failure. Conversely, 64% of Moroccans would not start a business out of fear of failure.

12. IBM was the world’s most innovative company in the world in 2020.

(Source: 24/7 Wall St.)

It’s purely based on the number of patents held by the company. IBM had a total of 9,130 patents at the end of 2020. The business startup statistics revealed that 5,000 of those were for artificial intelligence and cloud computing. 

IBM has been holding the top of the list for the past 28 years. South Korea’s Samsung came in second with 6,415 patents, Japan’s Canon came in third with 3,225, and the US’ Microsoft followed with 2,905 patents.

Startup Funding Stats

13. There were 66 venture capital-backed companies that joined the ranks of “unicorn” in 2020.

(Source: Embroker)

It seems that the venture capitalists are onto something. Each of these firms’ value was at least a billion dollars in 2020 (the industry definition of “unicorn”). Today, there’s a total of around 600 unicorn startups worldwide. Naturally, not all VC-backed firms will be successful, but that’s a chance investors take.

14. Venture capital investment for startups reached $300 billion in 2020.

(Source: Crunchbase)

That’s a 4% YOY increase when it comes to global venture funding, and it shows that there’s general optimism in the industry despite the Covid-19 pandemic that hit the economy last year. 

And thanks to new technologies, businesses can now start on much lower budgets. Investors are all hoping to get in on the ground floor and find the next generation of unicorns.

15. 75% of startups backed by venture capitalists fail.

(Source: Entrepreneur)

VC investors are known to take significant risks. The rewards are potentially big, but they must also consider the risk of failure. It also goes to show that throwing money at a problem doesn’t guarantee success.

Employees and Outsourcing Startup Jobs

16. In 2020, 36% of the US workers were freelancers.

(Source: VTCNG)

That’s equivalent to at least 59 million freelancers. Additionally, the statistics on small businesses show that 42% employ freelancers. This is another reason why startups can run on a shoestring budget. By outsourcing functions to freelancers, companies save a substantial amount on company perks. Moreover, in 2020, 34% of freelancers were forced to start new projects due to the pandemic.

17. By the end of 2021, freelancers will make up 42% of the US workforce. 

(Source: Website Planet)

The startup statistics for 2021 show that there’s been an ever-increasing movement toward using remote workforces over the last few years. This is made possible with technologies such as Skype and Google Drive, which, according to Google stats, have 1 billion users. Employees are now more capable of working remotely. By hiring remote workers, companies can reduce their overhead.

18. Around 39% of small business owners use cash to start their business. 

(Source: Guidant Financial)

According to the startup statistics worldwide, cash is the most preferred financing of those starting their small businesses. Next is rollovers for business start-ups (ROBS), better known as 401(k) business financing, at 20%.

19. In the United States, small businesses employ 47.3% of the private workforce.

(Source: Small Business Trends)

About half of the US private workforce is employed in the small business sector. Startup stats show that these companies have a significant impact on the economy. It’s worthwhile to encourage entrepreneurs.

20. Most employees of small businesses will stick around for about four years.

(Source: The National Small Business Association)

Generally speaking, it shows that small business owners are doing something right. At the same time, it’s a good idea to have an employee retention plan in place to incentivize them further to stay on. Essentially, this is one of the most interesting startup statistics today.

 Startups and Their Intellectual Property

21. China accounted for the highest number of patent applications worldwide in 2020. 

(Source: Garrigues)

Globally, there was a decrease in applications by 3% due to the impacts of the Covid-19 pandemic. However, if we take China out of the equation, there was actually an increase of 2.3% globally, according to the latest startup growth statistics.

22. The annual number of patent applications increased from 997,501 in 1990 to 3,224,200 in 2019 globally.

(Source: Statista)

It’s no secret that technology has been growing exponentially. It could account for the massive increase in patents over the last twenty years or so. Think about it—our world has changed substantially since 1990, just on a technological level. While we wait for more of these technology startup statistics, imagine how much more patent applications there will be once the 2020 year-end report comes out.

23. Patent applications are highest in the digital communications field.

(Source: Statista)

Coming in a close second are patent applications in the field of computer technology. The electrical machinery apparatus and energy field come in third place.

24. The United States patent application process isn’t geared toward new players.

(Source: World International Patent Organization)

Authorities have been tweaking the process to make it simpler. The small business and startup investment statistics show that they’re falling behind, though. China has doubled the number of patents on record. The Chinese patent office has seen 43,091 PCT applications in 2016. Even though the United States had more applications during the same period (56,594), this number has decreased compared to 2015.

25. Intellectual property services contributed $115.3 billion to the US trade deficit in 2020.

(Source: The Balance)

Do these startup ecosystem statistics indicate that innovation in the United States is greater than in the rest of the world? They might, but they could also suggest that startup funding in the United States is a lot higher.

26. More is spent on intellectual property than other business services in the US.

(Source: The Balance)

The $115.3 billion spent on intellectual property in the United States is higher than most other business services. The only service with a higher contribution is financial services with $135.8 million.

Startup Failure Rate Statistics

27. Around 37% of startups fail because they run out of capital.

(Source: Wilbur Labs)

A survey involving 150 founders shows that the number one reason why startups failed between 2000–2020 was running out of money. This indicates that entrepreneurs were moving forward too fast. Perhaps they were overestimating the value of their product or service. Whatever the reason, there are profitable startups that prove it can be done. 

28. Only 56% of startups will make it through to their fifth year.

(Source: United States Bureau of Labor Statistics)

Commonly held wisdom states that the first year is the toughest for startups. Namely, 78.1% of the businesses started in March 2020 made it through their first year. It seems that the startup failure rate paints a different picture. So while the first year is an adjustment, it may not rank as the most difficult. That’s why it’s essential to come up with a five-year plan before starting.

29. 80% of businesses will make it through their first year.

(Source: United States Bureau of Labor Statistics)

So what percentage of new businesses fail in the first year? The good news is that only one out of five businesses will fail shortly after starting out. Obviously, it’s still a struggle for a business to establish itself properly.

30. Around 77% of startup founders faced potential failure due to Covid-19.

(Source: Wilbur Labs)

Even huge organizations felt the wrath of Covid-19 last year. The Startup statistics on failure indicate that out of 150 startup founders who participated in the Wilbur Labs survey, 77% of them said that they almost failed because of Covid-19 in 2020. 

31. Improving or changing a business plan is the top pivot strategy.

(Source: Wilbur Labs)

Many entrepreneurs make the mistake of thinking that their business will be an overnight success. Startup failure rate statistics paint a less rosy picture. Namely, 59.3% of startups change their business plan to avoid business failure. 

32. Around 10% of startups fail due to burnout.

(Source: Wilbur Labs)

Unbelievable as it may seem, a small percentage of startups fail because of burnout. This could, in part, be a result of business owners trying to do everything themselves. 

So how do you succeed in startups? By starting with a carefully chosen team.

33. Food and restaurant services account for 12% of all startups. 

(Source: Guidant Financial)

The retail industry and business services follow closely, as they account for 11% of all startups. Health, beauty, and fitness services are not too far away either with 9%, while residential and commercial services make up 7% of the startup ecosystem. The startup company statistics show that these are the top five startup industries of all time.

34. Around 29% of business owners start a new business because they want to be their own boss.

(Source: Guidant Financial)

Most of us can relate to this. It should be noted that being your own boss might not be all it’s cracked up to be. Yes, you might be getting all the profit. But you’re also the one who has to deal with all the expenses and stress.

35. 4.4 million new companies started operating in 2020.

(Source: Oberlo)

It’s hard to tell the exact number of startups in the world in 2021. But in 2020, 4.4 million new companies started worldwide. This was the highest increase startups have seen over the past decade at 26.9%.

36. 53% of business owners cite the cost of health insurance as a significant concern for their business.

(Source: Small Business Trends)

Business owners want to offer benefits to attract the very best staff. However, startup risk statistics show that the problem, particularly in the States, is that health insurance is very expensive, but it’s a risk they have to take.

37. Quibi Holdings LLC is the costliest startup failure of all time, with a loss of $1.75 billion.

(Source: CB Insights)

Quib, an American startup offering streaming services for smartphones, lost $1.75 billion only after six months from its launch last year. The startup unicorn statistics reveal that this is the costliest startup failure of all time. Google’s Loon follows with a loss of $125 million.

38. Around 65% of small businesses in the US use business credit cards.

(Source: Small Business Advice)

Using credit cards for your business is generally a good idea. It’s also a convenient way to fund business expenses. However, out of 65% of businesses that use credit cards, only 50% actually use the business’ name. The startup funding statistics like this one may cause concern as using personal credit cards for doing business may put your personal budget at risk.

39. Some 36% of startup CEOs expect their employees to work remotely by January 2022.

(Source: Forbes)

The Covid-19 pandemic changed the startup landscape quite dramatically. At the height of the pandemic last year, 40% of all US workers had to switch to working remotely. This trend is more cost-effective for startups, and thus, the startup statistics in the US show that 36% of CEOs expect their employees to work remotely by 2022.

40. Impact-driven founders are the most successful.

(Source: Entrepreneur)

We should never underestimate the commitment and passion that it takes to persevere and get the business up and running. It’s going to mean a lot of work and tenacity to make your business a success. The more impact-driven the founders are, the more successful the business outcome, as confirmed by the startup success-rate statistics.

Final Notes

There are many misconceptions out there when it comes to startups. When starting your own business, it’s always best to rely on the verified startup statistics rather than hearsay. While a lack of capital is a big deal for startups, it’s also essential to pay attention to the ways you cut costs, who you’ve chosen for your team, and how you’ve protected your intellectual property.

ABOUT AUTHOR

Latest from WebsiteBuilder

99designs ProWritingAid Mojo Marketplace Placeit

Leave a Reply

Your email address will not be published. Required fields are marked *