Surprising facts about startups!

1. Fail, fail and fail, 90% of them Fail

A study by CB Insights showed that 9 out of 10 new start-ups fail, mostly because they have not done market research before they launch their product or service. In fact, 42% in a poll listed the reason for failure as no market demand for their business. Others listed self-destruction in the form of mediocre or subpar management. And, 72% found that their intellectual property was not a competitive advantage after they started operating as a business. Most start-ups also need between 2 and 3 times longer to validate their market than most founders expect.

2. There are three new start-ups every second

3 new start-ups launch globally every second, making up for 11,000 per hour, or 25, 9200 per day! In the U.S. alone, that number is much lower and usually averages at 3 per minute.

3. Start-ups gets investments from surprising places

Where once start-ups had to rely on banks and investment firms, they can now turn to a wide variety of investment opportunities ranging from angel funds to crowd funding. Angel investors raised $20.1 billion in capital in 2010 for 61,900 ventures, resulting in 370,000 jobs, or almost half of the private sector jobs created that year. Despite that, only an average of 10-15% of ventures that actually get funding.

4. Entrepreneurs start out working for other people

The Harvard Business Review showed that approximately 70% of investors started out by incubating their business ideas while working at a traditional job. The data revealed that many entrepreneurs started their own business in order to get away from bad leadership, but most often took the time to thoroughly plan out and create a business plan to gain funding before quitting their day job.

5. Most aren’t that concerned with equity splits

Dividing up money seems like it would be a big deal, but 80% of start-up founders spent less than an hour negotiating their equity split according to Noam Wasserman, author of “The Founder’s Dilemma.”

6. Most founders don’t stay on as CEO

While many founders start their business with the idea of retaining their role as CEO, many quite simply do not have the skills to do so. As a result, some 52% of start-up CEOs were removed from their role by the third round of company funding. Despite that, CEOs who can handle the needs of their business, and pass tasks that they cannot perform onto a capable employee to retain their position.

7. Information companies are most likely to fail

The statistics brain Research Institute complied on start-up failure by industry, and information companies come in at the bottom. In fact, on average, only 37% of information companies are still operating after four years. Conversely, real estate, finance, and insurance are the most likely to remain in business, with 58% still running after four years.

8. Start-ups with Team Succeed.

Start-ups with 2 or more founders, a balanced team, or who hire skilled employees to distribute work are more likely to succeed. In fact, single founders take 3.6x longer to reach scale compared to a founding team of two. Balanced teams also raise 30% more money and have an average of 2.9x more growth.

IN A NUTSHELL

Launching a start-up requires time, dedication, and a lot of capital, and unfortunately, many businesses do not make it that far. If you are a business owner, perhaps you can learn something from these facts to help your start up succeed.

Source: https://www.techedt.com/2016/12/8-facts-startups-will-blow-mind