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2020 STARTUP OUTLOOK
REPORT

STARTUPS SEE BRIGHT CONDITIONS IN 2020

For SVB’s 11th annual Startup Outlook Report, we asked founders and executives in the US, the UK, China and Canada to share their perspectives on the year ahead. Every industry today is touched by innovation in one way or another, creating job growth, new markets and long-term opportunity.

Startups are in a positive mood at the start of 2020. But the findings also underscore challenges around raising capital, finding talent and building
more-diverse leadership teams.

Read the full Startup Outlook Report below and follow the links to country-specific reports to learn if startups think that trade wars, Brexit and the return of IPOs may affect business. Download the report here.

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SVB CEO Greg Becker discusses the resiliency of the innovation economy and why he thinks there’s rarely been a better time to be an entrepreneur.

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Most US startups see business conditions improving. They tell us they plan to hire, and by a wide margin they expect venture capital to be their next source of funding. Access to talent, cybersecurity and consumer privacy are top of mind.

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Image of a London cityscape.

UK startups are the most optimistic about business conditions since the 2016 Brexit vote. But with tech and trade regulations and skilled-worker immigration rules still to be resolved, they worry that leaving the EU will come with a negative cost.

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Our latest report on the gender gap in startup leadership shows there is still a long way to go before reaching parity. And only 30% of US startups report they have programs designed to increase the number of women holding leadership roles.

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2020 GLOBAL STARTUP OUTLOOK FINDINGS

Jump to Business Conditions | Funding | Public Policy | Hiring | Diversity | Download Report


Business Conditions

Two-thirds of startups say 2020 will be better

The innovation economy continuously adapts to change, and entrepreneurs are optimistic by nature. Despite the dramatic political and economic transitions under way, startups consistently share a positive forecast for improving business conditions.

In addition, 79% of startups plan to hire in 2020, underscoring their critical role as job creators.

Chart describing your outlook for business conditions for your company in the coming year

Funding

Capital abounds, but it is not easy to access

While there is no shortage of investors, they are increasingly selective about how and when to invest. Just 12% of startups say it’s getting easier to raise funding, while 41% say it is getting harder. Even so, for those startups that sought capital in 2019, all but 11% were successful, and 56% said they raised their most recent round in less than six months.

“As an early-stage, diverse (with women and minority co-founders) medtech company, access to pre–Series A and A financing is a monumental challenge.”
—Co-founder, US medical device company

Chart showing the view of the current fundraising environment for companies like yours
 

Startup capital comes from many sources

With the rise of non-traditional sources of capital, startups report that they are tapping a variety of funders. Venture capital, however, was still the top source for those that recently raised capital.

Pie chart showing primary source of funding for private capital that was raised in 2019
 

Venture capital still dominates

Startups again expect venture capital to be their next source of funding. Interestingly,
12% of startups do not plan to raise money in the near future but to instead rely on organic growth.

Bar chart showing what the next source of funding will be
 

Most startups expect to be acquired

While headlines both trumpet and criticize recent IPOs, the fact is most entrepreneurs never expect to reach a public market exit (except in China, where an IPO is typically the top goal). And in this environment, it’s sometimes hard to pinpoint a long-term goal.

Chart showing the realistic long-term goals for your company

Public Policy

Access to talent is top public policy issue

Finding skilled talent is a top concern in many innovation hubs.

“Talent ‘wars’ continue to drive up costs and make scaling more difficult.”
—VP of finance, US cybersecurity company


“Cybersecurity and data sovereignty need to be addressed systematically by Canada for us to just maintain our standing in the world.”
—Executive, Canadian tech company

Bar chart showing the three most important public policy issues affecting companies like yours
 
 

Hiring

Many startups say hiring is getting harder

Low unemployment rates, competition for top talent, stiffer immigration rules and the high cost of living in global tech hubs combine to make hiring talent difficult. Demand is highest for product development and R&D roles.

“Access to EU talent and being a welcoming place are key for the UK to remain a technology leader.”
—VP of finance, UK cybersecurity company


“We should be open to educating everyone, and talented people should be allowed to stay and work in the US.”
—Co-founder, US fintech company

Chart showing how you describe the hiring environment compared with last year

Diversity

Entrepreneurship knows no boundaries

Entrepreneurs hail from countries all over the world, bringing their ideas to innovation hubs in the US, the UK and Canada. Half of startups in those three countries have at least one foreign-born founder.

“Bring back US entrepreneur visas for founders.”
—CEO, US AI company

% of startups with at least one foreign-born founder per region
 

Are women making it into startup leadership?

Industry leaders and individual companies are increasing awareness and efforts to improve female representation in tech leadership, but the gap to reach gender parity remains wide.

SVB will publish an in-depth report on Women in US Technology Leadership in H1 2020.

% of female C-suite executives and female board members
 

How are ethnic and racial minorities represented in startup leadership?

For the first time, we asked startups in the US, the UK and Canada about ethnic and racial minorities* in leadership positions.

% of companies with at least one C-suite executive who is ethnically or racially diverse and % of companies that have at least one board member who is ethnically or racially diverse
 

What are startups doing to encourage a diverse workforce?

We asked startups in the US, the UK and Canada what kinds of programs they have to increase diversity. While 43% say they have companywide promotion and hiring goals, fewer than one in five has these goals specifically for C-level positions. About one-third have board member diversity goals.

"Make it easier for injustices to be corrected and penalize VCs and boards for poor diversity.”
—CEO, US consumer internet company

Chart showing if your company has any programs to increase diverse representation in leadership

ABOUT THE SURVEY

Learn more about the executives in our survey and the businesses they lead.

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