Gazelles, Unicorns and Decacorns

Fio Group is an organisation committed to "Helping Entrepreneurs Grow". The objective of this newsletter is to look at the future of global entrepreneurship and the statistics, which is a crucial process behind how we make discoveries in science, make better informed decisions based on data, and predictions.

Gazelles (high-growth ventures), Unicorns (ventures valued at $1 billion), and Decacorns (ventures valued at $10 billion) appear to be dominating the landscape of entrepreneurship.?

In 2021, there were more than 700 ventures that have been valued at $1 billion or more by venture capitalists, and there seems to be a continued trend in more arising. However, the facts show that small- and medium-sized enterprises (SMEs) account for over 90% of businesses and 50% of employment of the worldwide population, contributing up to 55% of GDP in developed economies. Thus, it is clear that in developed countries, small firms are the economy. (Abstracts: Donald F. Kuratko)

In smaller less developed countries, the case is even stronger that small firms are most certainly the future of local economies. Entrepreneurship is at a crossroads. Gazelles and Unicorns (high growth ventures) are proliferating at a?breathtaking pace yet, the true heartbeat of a vibrant economy is the growth of small and medium?sized ventures.?

However, the entire realm of entrepreneurship appears to be drifting slowly away from the importance of smaller firms and focusing the entire emphasis on the relatively few tech giants. These giant corporations are now viewed through the prism of entrepreneurship.?

Venture capitalists in Silicon Valley have focused on potential disruptive technologies with the goal of scaling fast for huge financial returns. A Gazelle has been defined as a venture with at least 20 percent sales growth every year (for 5?years), starting with a base of at least $100,000. That term has been recognized for many years, but recently developed terms define a new type of aggressive scaling such as “Unicorn” (a venture valued at $1 billion) and “Decacorn” (a venture valued at $10 billion). “Blitzscaling” is another term now used for the funding mechanism for aggressive growth of a new venture, but it prioritizes speed over efficiency in the entrepreneurial world of uncertainty. While the risk is certainly always present with these blitzscaled ventures, many disruptive technology companies are growing faster than ever (Kuratko et al; 2020).?

In 2021, there were more than 700 ventures that have been valued at $1 billion or more by venture capitalists, and there seems to be a continued trend in more arising. As they continue to grow, many startups are surpassing the $1 billion level, and over 30 have achieved the $10 billion decacorn level, such as Facebook, Uber, and Airbnb. In 2021, Silicon Valley was home to three of the world’s five most valuable companies: Alphabet, Apple, and Facebook, valued together at almost $2.5 trillion. In terms of market capitalization, Microsoft, Apple, Amazon, Alphabet, Facebook, and Alibaba are included in the top 7 of all global companies. In 2020, VC investments totaled $130 billion supporting 6,022 firms. Unicorns were heavily favored by the VCs mega rounds of investments (Lee,?2021).

Significant to remember - each major tech firm and each Unicorn company started small as an entrepreneurial venture and many people actually forget this. Yet, there is a focus on these concentrated high-growth firms as the image of entrepreneurship.

Can the post-COVID-19 environment resuscitate the smaller ventures across the economy and rejuvenate a surge in entrepreneurial startups through the existing entrepreneurial ecosystems (Kuratko et al; 2017)? More significantly, will there be an avenue for the increased democratization of entrepreneurship versus the proliferation of only unicorns at the expense of other types of entrepreneurship? Will the immediate future enhance or constrain the entrepreneurial mindset for this generation? (Kuratko et al; 2021).

In a recent Delphi study of entrepreneurship, research about the future of entrepreneurship, there appeared to be support for a proliferation of smaller ventures in what was termed, “everyday-everyone entrepreneurship". The study showed that many researchers believed that this “everyday-everyone” entrepreneurship will be supported by a variety of technologies such as social media and crowdfunding, which will provide much needed tools and connectivity.

The researchers also believed that the increase in entrepreneurship education and training will add to this increase in entrepreneurship. “As such, democratization of technology and knowledge will empower individuals to see/create and act on opportunities, to solve problems, and to innovate.

Empowered individuals may even tackle wicked problems and grand challenges….It was proposed that, by 2030 everyday-everyone entrepreneurship will attract more media and research attention than high-growth entrepreneurship….” (van Gelderen et al; 2021 , p.23).

Crowdfunding: democratizing venture investments

In order for new ventures to rise up as well as previously closed small firms to survive and prosper, crowdfunding may be the best vehicle to change the landscape of entrepreneurship. In recent years, the growth of crowdfunding has been immense, and the statistics appear to validate its prevalence. For example, in 2019, there were 1,616 crowdfunding platforms in the USA, 99 in Canada, and 135 in Latin America (Technavio,?2021). Crowdfunding, according to various sources, is predicted to grow by $196 billion during 2021–2025. The global crowdfunding market?was calculated to be at $17.2 billion in 2020 and is determined to reach $300 billion by 2030, garnering a compound annual growth rate of 16% between?2020?and 2025.

The emergence of equity crowdfunding has created tremendous potential for individual investors and new entrepreneurial startups.?The crowdfunding model has three principal parts: the entrepreneur who proposes the idea and/or venture to be funded; individuals or groups who support the idea; and a moderating organization (the “platform”) that brings the parties together to launch the idea (Kuratko,?2020). Thus, scholars have noted that crowdfunding has the potential to democratize the new venture fundraising process by allowing the general public to get involved in early-stage funding (Stevenson et al;?2019).

Surprising Entrepreneurship Growth Statistics And Trends in 2023

Entrepreneurship is an important driver of economic growth and development. It has the potential to create jobs, spur innovation, and increase productivity in both developed and developing countries. As such, it’s essential to understand the current state of entrepreneurship around the world.?

Global Entrepreneurship Monitor (GEM) reported that more than 100 million startups are launched annually, about three new businesses per second.This statistic is a powerful indicator of the sheer magnitude of entrepreneurship growth around the world.

It demonstrates that the entrepreneurial spirit is alive and well, with new businesses being created at a rapid rate. This is an encouraging sign for aspiring entrepreneurs, as it shows that there is a wealth of opportunity out there for those willing to take the plunge and start their own business. It also speaks to the potential of the global economy, as these new businesses can create jobs, spur innovation, and drive economic growth.

The World Bank data reveals that small businesses generate approximately 60% of all employment in emerging economies.

This statistic is a powerful reminder of the importance of small businesses in emerging economies. It highlights the fact that these businesses are a major source of employment and are essential for economic growth. This is especially relevant in the context of entrepreneurship growth statistics, as it emphasizes the need for entrepreneurs to create and sustain small businesses in order to drive job creation and economic development.

According to the African Development Bank (AfDB), Africa has one of the highest regional entrepreneurship rates in the world, with around 22% of the working-age population starting new businesses.

This statistic is a testament to the entrepreneurial spirit of Africa, showing that the continent is a hotbed of business activity. It demonstrates that the region is ripe for investment and growth, and that there is a strong potential for entrepreneurs to succeed. It also highlights the importance of providing support and resources to entrepreneurs in Africa, so that they can continue to create jobs and drive economic growth.

The World Economic Forum estimates that digital entrepreneurship could create 10 million jobs in Africa over the next decade.

This statistic is a powerful indicator of the potential for entrepreneurship to drive economic growth in Africa over the next decade. It highlights the immense opportunity for digital entrepreneurs to create jobs and stimulate economic activity in the region. It also speaks to the potential for digital entrepreneurship to be a major driver of economic development in Africa, providing a much-needed boost to the region’s economy. In short, this statistic is a powerful reminder of the potential for entrepreneurship to create jobs and drive economic growth in Africa.

A study by the Global Entrepreneurship Monitor (GEM) found that in 2019, 39.3% of early-stage entrepreneurs were opportunity-driven in Sub-Saharan Africa.

This statistic is a powerful indicator of the entrepreneurial spirit that is alive and well in Sub-Saharan Africa. It shows that despite the many challenges faced by the region, there is a strong desire to create and innovate. This statistic is a testament to the resilience of the people of Sub-Saharan Africa and their commitment to creating a better future for themselves and their communities. It is a reminder that entrepreneurship is a viable option for those looking to make a difference and create a better life for themselves.

A 2021 study found that around 39% of entrepreneurs in the European Union were female.

This statistic is a powerful indicator of the progress being made in the field of female entrepreneurship. It shows that the European Union is making strides towards gender equality in the business world, and that more and more women are taking the initiative to become entrepreneurs. This is an encouraging sign for the future of entrepreneurship in the region, and it is a testament to the hard work and dedication of female entrepreneurs.

The European Startup Monitor (ESM) found that 2.3% of the adult population in Europe was involved in the creation of a new startup in 2017.

This statistic is a testament to the growing trend of entrepreneurship in Europe. It shows that more and more people are taking the plunge and starting their own businesses, which is a positive sign for the economy. It also indicates that the entrepreneurial spirit is alive and well in Europe, and that there is a strong support system in place for those who are looking to start their own businesses. This is an encouraging sign for the future of entrepreneurship in Europe, and it is a great indicator of the potential for growth in the region.

The Kauffman Foundation found that the rate of new entrepreneurs in the United States increased by 14.6% in 2020, compared to 2019.

This statistic is a testament to the resilience of entrepreneurs in the United States. Despite the economic downturn caused by the pandemic, the rate of new entrepreneurs increased by 14.6%, showing that the entrepreneurial spirit is alive and well. This is an encouraging sign for the future of entrepreneurship in the US and a reminder that even in difficult times, there are still opportunities to start a business and succeed.

A 2019 report by Startup Genome found that the startup ecosystem in the Asia-Pacific region has experienced rapid growth with 30% of global startups now located in the region.

This statistic is a testament to the incredible growth of the entrepreneurial spirit in the Asia-Pacific region. It shows that the region is now home to a significant portion of the world’s startups, indicating that the region is becoming a major hub for innovation and business development. This is an exciting development for entrepreneurs in the region, as it provides them with more opportunities to succeed and grow their businesses.

As reported by the Global Economy in May 2018, Luxembourg had the highest density of entrepreneurial ventures per 100,000 people of all countries, with 196.87 businesses established per 100,000 population.

This statistic is a testament to the success of Luxembourg’s entrepreneurial environment. It demonstrates that the country has created an environment that encourages and supports the growth of new businesses, allowing them to thrive and reach their full potential. This is an important indicator of the country’s commitment to fostering a culture of entrepreneurship and innovation, and serves as an example for other countries to follow.

A 2020 UK government report indicated that 99.3% of private sector businesses in the UK were small businesses (up to 49 employees).

This statistic is a testament to the entrepreneurial spirit of the UK, highlighting the fact that the vast majority of businesses in the country are small businesses. It speaks to the potential for growth and success that exists in the UK, as well as the potential for entrepreneurs to make a real impact on the economy. It also shows that the UK is a great place for entrepreneurs to start and grow their businesses, as the majority of businesses are small and can benefit from the support of the government.

WARNING

According to the Harvard Business Review, 75% of venture-backed startups fail.

This statistic is a stark reminder of the risks associated with entrepreneurship. It serves as a cautionary tale for aspiring entrepreneurs, highlighting the importance of careful planning and strategic decision-making. It also serves as a reminder of the need for adequate funding and resources to ensure the success of a venture-backed startup. Ultimately, this statistic serves as a reminder that success in the world of entrepreneurship is far from guaranteed.

According to Forbes, 90% of startups fail within the first five years.

This statistic serves as a stark reminder of the risks associated with entrepreneurship. It highlights the importance of careful planning and preparation when starting a business, as well as the need for ongoing support and guidance to ensure success. It also serves as a warning to potential entrepreneurs that the road to success is often long and difficult, and that failure is a real possibility.

According to the U.S. Bureau of Labor Statistics, the survival rate for new businesses after five years is roughly 50%.

This statistic is a crucial indicator of the success of entrepreneurship in the United States. It shows that, while starting a business is a risky endeavor, there is still a chance of success. This statistic is a testament to the resilience of entrepreneurs and the potential for growth in the entrepreneurial sector. It is a reminder that, with hard work and dedication, businesses can survive and thrive in the long run.

Fio Group is an organisation committed to "Helping Entrepreneurs Grow" and offers:

World class technology & innovation, deliberately planned collaboration and global finance.

Our cause is rooted in a deep commitment to creating lasting impact in the communities we serve and our success is anchored in the values we live every day. Our firm belief is that the future success of global economies lies in the hands of private entrepreneurs and business.

Entrepreneurs, who have ease of access to specialist business services, backed by unwavering support, mentorship and guidance to grow their businesses and focused on creating much needed job opportunities and prosperity for their people and communities they live in. Our objective is being the catalyst to marrying smart entrepreneurs with smart money, with the ultimate goal of generating much needed job opportunities and more social justice globally.

Fio’s purpose is to change life as we know it.?The insights and services we provide help to create long-term value for our clients, entrepreneurs, people and society, building trust in capital markets. We believe in the vital importance of people coming together to create and grow enduring private businesses that make a difference in the world.

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1. Technology
2. Education
3. Healthcare
4. Sustainability
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References:

Donald F. Kuratko known as “Dr. K” is considered a prominent scholar and national leader in the field of entrepreneurship authoring over 200 articles on aspects of entrepreneurship and corporate innovation in journals such as?Journal of Business Venturing, Entrepreneurship Theory & Practice, Strategic Management Journal, Journal of Operations Management, Small Business Economics, Journal of Business Ethics, and?Business Horizons.

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