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As a Valentine’s Day gift to the community, Silicon Valley Bank issued its eighth annual Startup Outlook Report, resulting from a survey of nearly 950 technology and healthcare executives in startups, most based in the US, with additional input from businesses with primary operations in the UK and China. SVB’s survey asked entrepreneurs for their views on access to capital, hiring, general business conditions, public policy issues and other factors relevant to their businesses. Nearly all of the survey respondents were privately held companies, with the majority in the tech sector and under $25 million in annual revenue. As in years past, the Report has some very useful data reflecting the current views of a large group of startup entrepreneurs.
Some key takeaways from the survey responses for US-based startups:
- Nearly all thought business conditions would improve or remain the same in 2017 compared to 2016, but few think things will be “much better” in 2017.
- Raising capital is more difficult, with 88% reporting their view of fundraising as “extremely or somewhat challenging.”
- The majority anticipate traditional venture capital will be their next source of funding, with an increasing percentage viewing corporate investors (corporate venture arms) as an important source of future capital.
- The majority view an acquisition as the likely outcome for their startup, with just 16% responding that an IPO is a realistic long-term exit strategy.
- Anticipated hiring is consistent with past years, with 79% expecting to grow their workforce in 2017.
- Hiring technical talent is viewed as “challenging or extremely challenging” by 90% of respondents, but this is down from 95% in 2016, so perhaps recruiting will be a bit easier this year.
- Women in tech statistics have worsened. 70% of startup boards have no women members (up from 66% last year) and 54% have no women executives (up from 46% in 2016).
- Hiring talent and healthcare costs are viewed as the most important public policy issues affecting the responding startups.
- 26% indicated US laws have impacted their decision to grow outside of the US, citing immigration, tax and regulatory issues in about equal parts.
See and download the full US Report here for additional detail and numerous graphics showing the trends over the past few years. You may also access and download reports with responses from startups in the United Kingdom and China. There are some interesting similarities and contrasts with the US data. For example, in all three countries access to talent is consistently the top-ranked issue facing startups. Unlike the US and the UK, the majority of China-based startup respondents indicated an IPO is their long-term exit plan (versus 16% in both the US and the UK) and China has significantly more startups with women in executive positions (63%) than the US (46%) and the UK (42%).