Startup Spark

New study helps define startup importance

by ShannonCherry on March 25th, 2008

A continuing study by Ewing Marion Kauffman Foundation hopes to determine what startup decisions make a difference.

The private, nonprofit foundation that focuses on advancing entrepreneurship and innovation has been following nearly 5,000 businesses nationwide since they were founded in 2004.

Some of their initial research shows:

• Nearly 60 percent of the businesses had no employees their first year. About 25 percent had two or more employees, and less than 4 percent had more than 10 employees.

• Thirty-seven percent had no revenue in their first year of operation. But about 45 percent had a profit and about 17 percent had profit in excess of $100,000.

• Nearly 44 percent of new businesses had no debt financing during their first year, and many were started with very little debt financing. About 17 percent of the businesses started with $5,000 or less, and nearly 11 percent started with $100,000 or more.

• A little less than 9 percent of the firms closed in 2005. Women-owned businesses had a survival rate of 89 percent, while men-owned businesses had a survival rate of about 92 percent. About 88 percent of black-owned businesses survived, compared with 91 percent of Asian-owned businesses and 92 percent of white-owned businesses.

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POSTED IN: Entrepreneurship