Small Business Strikes Back: The Numbers Behind The Next 1000
March 18, 2021
In 2020, American venture capitalists invested an unprecedented $156 billion dollars into 12,254 startups, setting records in biotech, pharma and fintech. There were a record 454 initial offerings in the U.S. markets, generating over $167 billion.
But pull out a map, and you’ll see a country full of small-scale entrepreneurs who don’t have access to venture funding or Silicon Valley’s unicorn factory. According to the Kauffman Foundation, 89% of U.S. small businesses are either sole proprietorships or have less than 20 full-time employees.
The majority (83%) are funded from savings, credit cards, and loans from family or friends, with approximately $80,000 in startup capital for men and $54,000 for women. For people of color, the situation is even more extreme. Over 88% of Black-owned businesses, for instance, are one-person shops, according to the latest data from the U.S. Census Bureau.
Although these businesses are small, their importance to the U.S. economy is enormous. Before the pandemic, small businesses with less than 500 employees accounted for two-thirds of net new American jobs and generated 44% of U.S. GDP.