Americans filed 5.5 million applications to start new businesses in 2023, nearly 1.8 million of which are highly likely to hire employees. Both figures are series highs, slightly surpassing 2021’s banner year when the disruptions wrought by the pandemic pushed early-stage entrepreneurial activity to its prior record. The latest data from the U.S. Census Bureau’s Business Formation Statistics through December 2023 provide further evidence that the background rate of startup activity in the U.S. economy has settled at much higher levels than before COVID-19 struck. In total, 484,000 more likely employer business applications were filed in 2023 than in 2019, an increase of 37 percent. Last year’s haul was also 8 percent higher than 2022’s.
- Date Posted:
- January 12, 2024
Venture capital firm Fifty Years has done a nice job cataloging exactly which industries see the most, and least, investment relative to their size. Though unfortunately, they aren’t very clear about their data source for it. They use this to create an “Opportunity Ratio”- current market size divided by current startup funding. They call the industries with the largest Opportunity Ratios the “Top Underfunded Opportunities.” I don’t necessarily agree; some industries face shrinking demand, prohibitive regulation, or other fundamental issues making them bad candidates for investment. Conversely, investors haven’t just focused on software randomly or through imitation; they see that it is where the growth is.