New Kauffman Report Finds Economic Challenges May Actually Provide Fertile Ground for Startups - Half of Fortune 500 Founded During Downturns

A new study released by the Ewing Marion Kauffman Foundation reports that challenging economic times may actually serve as fertile ground for entrepreneurial activity.  The study, which is called “The Economic Future Just Happened,” found that well over half the companies on the 2009 Fortune 500 list were founded during a recession or bear market and just under half of those on the 2008 Inc. list were also launched during challenging economic times. 

The study observes that while recessions create economic grief, they can also often act as an extra spur in founding new companies especially if the founders perceive their competition might be in a weakened state.  Economic downturns also often make available a larger pool of highly talented employees to support a new venture. 

“While startups may not begin with the intention of reaching the Fortune 500 list, they are hard at work under the radar,” said Dane Strangler, senior analyst at Kauffman.  “These companies may remain invisible to most of us, or they may one day grow into household names.  Either way, they’re steadily recreating our economy – generating jobs and innovations.” 

Download the full report.