Pando

Every second, three startups are launched globally, as VCs invest $90k a minute

By David Holmes , written on July 22, 2015

From The Money Desk

Everyone from your local bodega operator to your third grade teacher has a startup.

I think my mom has a startup. Indeed, it’s a pretty great time to raise venture capital in America. When Silicon Valley's creators tried to conjure up a plausible reason for why its fictional startup Pied Piper would struggle to raise $10 or $15 million, the answer they got from most insiders was, "Oh, there's no reason." And while the chances of your startup breathing the rarefied air of “the three comma club” are still only 1 percent, there are more venture-backed private companies that have notched a billion dollar valuation than ever before -- almost 100 at last count.

But just how quickly are startups being launched around the world?

Gasoline, an apparel brand that makes T-shirts and other swag for the entrepreneurial set sought to find out. And so with data from the Kauffman Index, GEM Global Report, and the National Venture Capital Association, the company created a “Live Startup Stats” widget to track the formation and dissolution of companies worldwide and in real time.


via Shopgasoline.com

Since opening the page around 16 hours ago last night, nearly 20,000 startups have been born and, strikingly, almost the same number have died. This suggests we’ve hit a critical mass for company formation around the globe. As the rate of startup births and deaths has begun to hit a plateau, the amount of venture cash invested in these companies is around $1.8 million -- meaning that each startup is only raising an average of $900 apiece, suggesting a lot of these “startups” are really bootstrapped operations started in a basement or garage.

Around 90 percent of this startup formation is happening globally, as only 1,969 were launched in the US. The ratio between US startups with a male founder and those with a female founder are far more even than some statistics suggest, 1380 of the new startups have a male founder, while 985 have a female founder (that the sum of these two figures exceeds 1,969 means only that some of these companies have multiple founders, one male, one female. And yet, according to Pitchbook, only about 10 percent of US companies that have raised a round of funding since 2005 have a female founder. That means, either investors are becoming much more willing to invest in women, or that women are launching plenty of companies -- they just aren’t getting money for their ideas at the same rate that men do. This contradicts the counter-argument over gender equality in the Valley alleging that “men simply start more companies than women.” They do, not by such a large margin to excuse the incredibly low percentages of women capable of raising money.

But Gasoline is quick to put the statistics in perspective: Despite the head-spinning rate at which companies are being founded globally -- 3.17 startups are founded per second -- only 2 percent of the world’s population will ever start a startup.