SANTA CLARA, Calif.,
Feb. 11, 2020 /PRNewswire/
-- Silicon Valley Bank (SVB), the bank of the world's
most innovative companies and their investors, today released the
11th edition of its
Startup Outlook Report. Kicking off the new decade, the
report found that most startups are optimistic about global
business conditions amidst economic and political uncertainty, with
67% of entrepreneurs expecting that conditions will improve this
year compared to 2019. However, the report finds that despite this
optimism, startups are concerned about raising capital and hiring
talent. Amid calls for greater diversity in the startup community,
the report underscores the large gap that must be closed before
reaching gender, ethnic and racial parity in tech leadership roles.
The report is based on a survey of 1,100 startup founders and
executives in the US, the UK, China and Canada.
"The 2020 results underscore a few key themes: There's
rarely been a better time to be an entrepreneur. Two-thirds of the
startups we surveyed are optimistic about improving business
conditions, almost all are planning to hire, and most of those who
are attempting to raise capital report they are successful," said
Greg Becker, CEO of Silicon Valley
Bank. "We know economic and political events are hard to
predict, especially how they may affect access to capital and the
skilled talent needed to fuel growth. Still, startup founders and
innovators are resilient. Survey results of the last three years
generally describe a steady level of confidence, even in the face
of continuous market shifts."
Global Findings
Following are the key findings from
the global survey, which was conducted between October and
November 2019. Most Startup Outlook
2020 respondents are founders or executives of companies with fewer
than 25 employees and less than $25 million in annual
revenue. The full report is available at
https://www.svb.com/startup-outlook-report-2020.
Business Conditions and Hiring
- 67% of entrepreneurs expect business conditions in 2020 to be
better than 2019; 24% expect business conditions to be the same as
2019.
- 79% of startups plan to hire in 2020, underscoring their growth
plans and roles as job creators, but 45% of startups say it is
getting harder to hire.
Exits
- Most startups in the US, UK and Canada say their long-term goal is to be
acquired as opposed to completing an IPO.
Raising Capital
- Despite an influx of capital, nearly half (41%) of startups say
it is getting harder to raise funding; just 12% say it's getting
easier.
- Of those who successfully raised capital in 2019 (89%), 56%
said they raised their most recent round in less than six months.
Venture capital was the primary source of funding, followed by
friends and family.
- 36% of startups expect venture capital to be the source of
their next funding.
- 12% of startups do not plan to raise money in the near future,
but instead rely on organic growth.
Diversity in Leadership
- Half of startups in the US, UK and Canada have at least one foreign-born founder,
highlighting the fact that entrepreneurship knows no
boundaries.
- 43% of startups have at least one female C-suite executive, and
42% have at least one female board member.
- 42% of startups have at least one C-suite executive who is
ethnically or racially diverse and 44% have at least one board
member who is ethnically or racially diverse. Please see the report
for how ethnic and racial diversity is defined.
- 26% of startups have programs in place to increase diverse
representation in leadership.
- When asked about the types of programs, 43% of startups said
they have company-wide promotion and hiring goals, but fewer than
one in five has these goals specifically for C-level positions.
Another one-third has diversity goals for board
members.
- The most common programs in-place include flexible work
environments, recruiting outreach/interview techniques, leadership
development and training and supporting diversity-focused
organizations.
Public Policy
- Access to talent is the top public policy issue impacting half
of startups around the world.
- Secondary concerns include cybersecurity and consumer privacy
(both at 29%), and corporate taxes and international trade (both at
26%).
For additional survey results, please visit:
https://www.svb.com/startup-outlook-report-2020. SVB will
publish an in-depth report on Women in US Technology Leadership in
Q1 2020.
Follow the conversation on Twitter
at @SVB_Financial with #StartupOutlook
About Silicon Valley Bank
For more than 35 years, Silicon Valley Bank (SVB) has helped
innovative companies and their investors move bold ideas forward,
fast. SVB provides targeted financial services and expertise
through its offices in innovation centers around the world. With
commercial, international and private banking services, SVB helps
address the unique needs of innovators. Learn more
at svb.com.
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SOURCE Silicon Valley Bank