Question
What percentage of startups fail within the first five years?
Answer
About 50% of startups close within their first five years, based on U.S. Bureau of Labor Statistics survival data. The odds shift a lot depending on your industry, and the steepest drop happens early rather than late.
| Time in business | Approximate survival rate |
|---|---|
| Year 1 | ~80% |
| Year 2 | ~70% |
| Year 5 | ~50% |
| Year 10 | ~35% |
- Industry swings the odds: restaurants close far faster than healthcare or professional services.
- Top reasons founders cite: cash flow problems and lack of market demand.
- Early years are riskiest: businesses that reach year three have meaningfully better long-term odds.
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