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Silicon Valley Bank is pleased to present our 11th annual Startup Outlook Report, capturing entrepreneurs’ perspectives on the health of the innovation economy. For our 2020 report, we drew on 1,100 responses from technology and healthcare founders and executives based in the US, the UK, China and Canada.The headline. Two-thirds of these entrepreneurs tell us they expect business conditions to improve in 2020, underscoring the resiliency of the innovation sector. This level of confidence has essentially remained unchanged over the past few annual surveys, even in the face of shifting economic and political headwinds and increasing scrutiny of the tech sector.The 2020 results underscore a few key themes. There’s rarely been a better time to be an entrepreneur; almost all are planning to hire, and most of those who are attempting to raise capital report that they are successful. In many ways, technology has reduced the cost of entry, allowing companies to more quickly solve for product-market fit or move on. But there’s another part to the story. As technology becomes embedded in nearly everything we do, the debates grow louder over who should have access to tech jobs and why most leadership roles still go to white males. Front and center now at the highest levels of many governments are discussions about how to handle data privacy and cybersecurity issues. And more than ever, we are all talking about the real-world impacts of the technology revolution.Entrepreneurs are not ones to shy away from tough problems; in fact, they thrive on the pursuit of solutions. We do this report every year with the goal of helping startups, policymakers and the public understand what drives the innovation economy, and we hope you find useful information that can help you succeed in 2020. Let us know what you think.

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.

Capital abounds, but it’s 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.

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.

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.

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.

Accessto talent is top public policy issue

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

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.

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