20% of startups fail within the first year

39% of startups fail within the first three years

50% of startups fail within the first five years

65% of startups fail within the first 10 years

Finally, within 10 years of opening for business, around 65% of U.S. startups will fail—with just 218,499 of the original 628,840 businesses opening in this time period surviving. ¹ This demonstrates the long-term challenges that entrepreneurs face, such as sustaining profitability, navigating shifts in the market and industry landscapes, and getting the edge over competitors.

Making it beyond a decade is a significant achievement for any business, typically accomplished through adaptability, refinement and steady revenue. These figures also reflect the importance of strategic planning, as many businesses can fall victim to financial issues, market demand and industry competition.

246,739 startups opened in 2022 failed by 2023 in the United States

Around 786,888 new startups are created every year

First-year startup failure rates have been stable since the 1990s

The failure rate for startups in their first year has been pretty consistent since the 1990s, averaging 20% since 1994, suggesting that the fundamental challenges of starting a new business remain the same despite changes in technology, market conditions and consumer behavior. ¹ Entrepreneurs will always face the same issues such as finding the right product, managing cash flow and building a customer base.