Statistics about startup success vs. failure rates?
Are there any statistics that measure the success vs. failure rates of startups?
The definition of success would be to attract first or second round of funding and failure would be to not get anymore funding after the initial seed funding.
Thanks.
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By your definition of success a Ponzi Scheme would be the most successful business. And what if you are self funded? – Karlson 12 years ago
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You are ignoring the companies that don't need funding from a VC. They make enough money to survive. – Mhoran Psprep 12 years ago
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I agree with Karlson. I would call "success" the implementation of a sustainable business model. – Deleted 12 years ago
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I agree with Karlson - This is a horrible way to define success and failure. – Tim J 12 years ago
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I agree it's not a very good definition, but funding rounds can in turn mean that the business model being sold to the funders is still attractive for them to push in more money. – Eminemence 12 years ago
3 Answers
You don't get to hear about the "failures", so it would be hard to compile those stats.
You might want to approach a few VCs and see if they want to share ballpark figures.
The failure rate is pretty high ~90%
http://futurestartup.com/2011/12/18/globally-nearly-90-startup-business-fails-only-10-out-of-100-sustain-at-last-what-leads-this-10-startup-to-success/ Due to another paper 80% of IT startups are failing in the first year.
this one http://www.statisticbrain.com/startup-failure-by-industry/ tells that 37% of IT startups are still alive after 4 years.
Also it on depends what do you mean under 'success' and 'failure'. Only 1% of startups are earning much, like 10% are earning enough for living and like 90% pretty nothing.
So absolute success rate is like 1%
Well I have come across various everything from 70% to 95% (95% for Indian startups). But would you really simply go by a statistic on this? Frankly, no sane risk averse person would ever think of going for a startup, doing a well paying job is far less hassle any day and their is far more peace of mind.
But hey, you gotta be a little crazy to think your startup will be among the few successful ones.
