Amid global uncertainty, startups aim to hire and see opportunities in 2017
Silicon Valley Bank releases Startup Outlook 2017, our annual report on the health of the innovation economy
Greg Becker, President and CEO of Silicon Valley Bank
Silicon Valley Bank presents Startup Outlook 2017, the bank’s annual report on the health of the innovation economy. This year, it comes at a time of significant transition around the world, and opportunity in the innovation sector. In its eighth year, the Startup Outlook survey asks entrepreneurs to share what they are thinking about business conditions, access to capital and talent and the critical policy issues that help or hinder their success.
Nearly 950 technology and healthcare executives, primarily from the U.S., U.K. and China, participated in the survey, which was conducted shortly after the November 2016 U.S. presidential election.
Given this timing, we did recognize some uncertainty in the responses from what is historically an optimistic group. As the U.S. transitions to a new administration and the U.K. negotiates Brexit, startup sentiments and markets may shift when policies and priorities become clearer. In China, we’re seeing similar themes as the country navigates a historic transition from an industrial to innovation economy.
Against this backdrop, there is good news. The innovation sector is building strength after a healthy recalibration in 2016. Public markets have bounced back, jobs reports are more optimistic, investors are doing deals, valuations corrected, more funding options are available and the exit market has improved. No matter where they are located, at least 85 percent of entrepreneurs are expecting M&A, the ultimate exit for most startups, to increase or stay the same. In the U.S., SVB is predicting the number of venture capital-backed IPOs to double or even triple over 2016.
Here’s what else we see: There is more potential now for innovation to thrive than in the last 25 years. The breadth of opportunity created by old world industries being transformed by technology continues to expand globally. Still, companies forming now will have to prove their value with a higher bar as investors continue to identify opportunities with the most promise. We have a long-term positive outlook for the innovation economy, but individual startups will face challenges. It’s the nature of the business of building disruptive companies. So mindful of the unicorn lineup awaiting exits, we will not be surprised to see companies this year struggle and fail, even potentially more than in recent years. This is healthy innovation.
Thank you for your interest in Startup Outlook 2017. We hope the findings can be useful as you chart your own path or follow this sector. Looking globally, the opportunities for innovation are abundant.
