As one with similar plans to jpulgarin (minus the dancing?), I too am quite interested in relevant research. I know Carl Shulman has investigated entrepreneurship success rates but I don’t know exactly what he found—I think I’ll email him to find out. I am particularly curious about that ‘9/10 startups fail’ statistic, which is repeated everywhere but I haven’t yet seen confirmed.
That’s not the raw data, it’s adjusted to match groups for a comparison. If you look elsewhere in the paper:
The overall success rate on first time ventures is 25.3%. Not surprisingly, serial
entrepreneurs have an above-average success rate of 36.9% on their first ventures: venture
capitalists are more likely to be more enthusiastic about financing a successful entrepreneur
than one who has previously failed.
That’s for IPOs only, adding in companies that were acquired, and companies that remained private but made their owners a good amount of money via compensation packages and future sale or IPO would further boost the stats. See my 80,000 hours posts on this.
Carl wrote a blog post over at 80,000 Hours where he discusses success rates for startups, and how these data might affect your career choice if you’re aiming to donate a lot of money to effective charities:
As one with similar plans to jpulgarin (minus the dancing?), I too am quite interested in relevant research. I know Carl Shulman has investigated entrepreneurship success rates but I don’t know exactly what he found—I think I’ll email him to find out. I am particularly curious about that ‘9/10 startups fail’ statistic, which is repeated everywhere but I haven’t yet seen confirmed.
I’ve spoken to Carl about the subject and he pointed me to this paper: http://www.nber.org/papers/w14219
This paper puts the success rate of venture-backed companies at ~18%.
Not everyone gets VC backing, though, which lowers your odds.
That’s not the raw data, it’s adjusted to match groups for a comparison. If you look elsewhere in the paper:
That’s for IPOs only, adding in companies that were acquired, and companies that remained private but made their owners a good amount of money via compensation packages and future sale or IPO would further boost the stats. See my 80,000 hours posts on this.
Carl wrote a blog post over at 80,000 Hours where he discusses success rates for startups, and how these data might affect your career choice if you’re aiming to donate a lot of money to effective charities:
Salary or startup? How do-gooders can gain more from risky careers