2008_vc_funding_oddsStarting a business is easy. You can legally create a business entity in a few hours with a couple hundred bucks. The hard part is raising capital for growth and keeping the business running long term. It’s a long, hard road and it is not for everyone.

I always encourage would-be entrepreneurs to take the leap and go for it, but before you do you should know what you are up against. Here are a few sobering facts:

  • According to the U.S. Small Business Administration, roughly 50% of small businesses fail within the first five years.
  • In 2008 627,200 U.S. businesses were born, 595,600 businesses closed and 43,546 filed for bankruptcy.
  • Only 2,765 venture capital deals were done in all of 2009.
  • A typical venture fund may invest in 1 out of 400 opportunities presented to it.

But it isn’t all bad news. Plenty of small businesses beat the odds, never get funding and have a huge impact on the US Economy. Small businesses:

  • Represent 99.7 percent of all employer firms.
  • Employ just over half of all private sector employees.
  • Pay 44 percent of total U.S. private payroll.
  • Have generated 64 percent of net new jobs over the past 15 years.
  • Create more than half of the nonfarm private gross domestic product (GDP).
  • Hire 40 percent of high tech workers (such as scientists, engineers, and computer programmers)
Ted Murphy

Ted Murphy

Ted Murphy is an American entrepreneur. He is currently the Founder, Chairman, and Chief Executive Officer of IZEA, a technology company that provides software for influencer marketing.


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