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Startups are Hot Again

Posted on 8.04.2016

Venture Capital investment might be at their lowest level in years, but startups are back and in a big way.

According to the 2016 Kauffman Index of Startup Activity released this week, key measures of new business creation in the U.S. point upward fo rhte second year in a row. The Startup Activity Index, a key annual indicator of new business creation, rose to 0.38 in 2016 – going up for the second year in a row – a mere two years after plunging to its lowest level in two decades.

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“The latest Startup Activity Index data show entrepreneurship finally recovering, with new business creation reaching close to the peak preceding the Great Recession drop,” said Arnobio Morelix, senior research analyst at the Kauffman Foundation, which conducts the study. “Based on the increasing number of new entrepreneurs – the nation’s job-creation engine – the United States entrepreneurial economy has begun expanding. Recent job creation numbers by the Bureau of Labor Statistics also show this, with 889,000 jobs created by new establishments in the last quarter of 2015 alone – the highest job creation number by new establishments since early 2008.”

The Rate of New Entrepreneurs increased by more than 15 percent from two years ago, with approximately 330 out of every 100,000 adults becoming entrepreneurs each month during the latest year.


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