Silicon Valley Bank releases ninth annual Startup Outlook report based on more than 1,000 survey responses from startup leaders in innovation hubs around the world
SANTA CLARA, CA – January 30, 2018 – Silicon Valley Bank (SVB), the bank of the world’s most innovative companies and their investors, released its ninth annual Startup Outlook report today. The survey found that many startups globally believe that business conditions will be better this year compared to 2017, with 30 percent globally noting that 2018 conditions will be much better.
The series of reports offers international perspectives from more than 1,000 startup founders and executives, primarily in the US, UK and China. The reports examine startup leaders’ insights on business conditions, fundraising, hiring, workforce diversity and public policy issues, including the impact of regulations, taxes and immigration policies.
“Despite the volatility we’ve seen in the last year across the globe, the innovation economy is signaling confidence and optimism for their businesses in 2018,” Greg Becker, CEO of Silicon Valley Bank, said. "Most startups say they are hiring, expect a strong M&A environment and in the US and the UK they report fundraising is getting less challenging. Finding the right talent to grow their businesses continues to be a strain for startups everywhere.”
“In today’s fast-changing world, it’s more important than ever to continue promoting companies that are inventing the future. It’s imperative to remain supportive of the innovation economy as it becomes an even bigger driver of job growth and contributor to the overall economic health by creating good-paying jobs that attract best-in-class talent and offer affordable healthcare to employees.
Most US Startup Outlook 2018 respondents are founders or executives of companies with fewer than 50 employees (59 percent) and less than $25 million in annual revenue (63 percent). The key findings from the US survey, which is based on responses from more than 620 executives at technology and healthcare startups follow. Startup Outlook reports specific to the UK and China are available here.
- Sixty-one percent of respondents say they expect 2018 to be better than 2017 and 34 percent expect it to stay the same
- Only five percent of respondents expect business conditions to be worse, down three percentage points from 2017
- Nearly a quarter (24 percent) of startups surveyed say the current fundraising environment is “not challenging,” which indicates access to capital is easing
- Despite the increasing viability of ICOs, more than half (54 percent) of startups say they expect their next source of funds will come from venture capitalists followed by angel/micro VC or individual investors (19 percent)
- Acquisition continues to be the most common path to exit, with 57 percent of startups indicating they believe they will be acquired vs. going public or staying private
- With an improved outlook for IPOs, there is a small increase in the percentage of startups that expect to go public (18 percent), which is up from 16 percent in 2017
- Half of respondents believe there will be more M&A activity in 2018
Hiring & Diversity
- More than 80 percent of startups say they are hiring, which is a five-year high
- While most startups plan to hire, 91 percent say that finding workers with the skills necessary to grow their business is somewhat or extremely challenging.
- This year, more startups say they have programs in place to increase the number of women in leadership (41 percent vs. 24 percent in 2017), yet more than 70 percent have no women on their boards of directors and more than half (57 percent) have no women in executive positions
- The three most important public policy issues affecting startups are access to talent (64 percent), healthcare costs (42 percent) and cybersecurity (39%)
- Nearly one-third of startups say that laws and regulations prompted them to move at least some of their non-sales operations offshore; the biggest driver being US immigration policy (46 percent) followed by tax policy (28 percent) and the regulatory environment (26 percent)
- More than half of startups say at least one member of their founding team is an immigrant
For additional survey data, including a closer look at hiring, fundraising and respondents’ views on public policy issues, please visit: www.svb.com/startup-outlook-report/
About Silicon Valley Bank
For 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.