Handmade Open sign at Gio Gelati, a small business in San Ramon, California. (Photo by Smith Collection/Gado/Getty Images)
Gado via Getty Images
This morning, the Ewing Marion Kauffman Foundation released its National Report on Early-Stage Entrepreneurship in the United States: 2025, which evaluates the launch of small businesses in the United States over the past 30 years. The report, the most comprehensive longitudinal analysis of its type, found that the starting of new businesses has returned to pre-Covid-19 levels, but that more work needs to be done.
Based in Kansas City, Missouri, the Ewing Marion Kauffman Foundation works to advance economic mobility in Kansas, Missouri, and their surrounding states through grantmaking, research, and programs. It also tracks entrepreneurship in the U.S. and shares these findings nationally.
Researchers evaluated early-stage entrepreneurship from 1996-2026 using the Kauffman Early-Stage Entrepreneurship Index, which uses four equally-weighted indicators of early-stage entrepreneurship activity. These Kauffman Indicators of Entrepreneurship are a leading source of national and state-level data on new business creation in the United States and are early-stage measures of entrepreneurial activity. They are:
- Rate of new entrepreneurs
- Opportunity share of new entrepreneurs
- Startup early job creation
- Startup early survival rate
Here are three major takeaways from the report.
1. Entrepreneurship is Back to Pre-Covid Levels
Overall, the analysis found that entrepreneurship returned to pre-pandemic levels with immigrants accounting for much of that growth. Approximately 6.6 million American adults started a new business in 2025, with immigrants opening 2.3 million businesses last year, and that was twice the rate of native-born Americans. Additionally, Latino Americans started roughly 2 million businesses, Black Americans launched 1.1 million, and white Americans opened roughly 4 million.
2. Many Entrepreneurs Are Opening Businesses Out of Necessity
However, researchers also found that the opportunity share of new entrepreneurs, the percentage of new entrepreneurs who started a business out of choice instead of necessity, is still below pre-Covid levels. The share in 2025 was 83.3% and that was up from 69.8% in 2020, but still lower than the 86.9% in 2019. In turn, the startup early survival rate was 77.9%, which was slightly lower than in 2024 and still under the rate of 79.4% in 2024.
3. The Gap Between Men and Women Opening Businesses Remains Virtually the Same
In addition, the report also shows that the disparity between men and women opening businesses has remained fairly constant for the last 30 years. For example, the rate of new entrepreneurship in 1996 was 0.26% for women and 0.38% for men. In 2025, those numbers were 0.28% with women and 0.44% for men. Despite these gaps, the authors also noted that the rates for both women and men are above pre-pandemic levels.
The Ewing Marion Kauffman Foundation also supports other researchers in their efforts to advance equitable economic mobility with grants of $150,000 or more per year. Parameters for funding are listed on the foundation’s website, but it is looking for proposals that deepen the understanding of equitable economic mobility and identify areas where economic opportunity is flourishing or being hindered. The foundation wants to support projects that help inform change at a systems level so while neither the applicants nor projects need to be based in Kansas City, the findings need to be applicable to the area. Submissions are due by June 30, 2026, with the application portal opening on June 1.
Researchers also said that the data shows that launching and maintaining a business in the U.S. is challenging. Because of this, it is critical that resources to support entrepreneurs at all stages meet them where they are. Kudos to the Ewing Marion Kauffman Foundation for tracking this information to help support this effort.
