Share of Veteran-Owned Startups Declining, Report Finds

The percentage of veterans among all new entrepreneurs and the rate of new business creation among veterans both fell between 1996 and 2011, a new report from the Ewing Marion Kauffman Foundation finds.

According to the Kauffman Index of Entrepreneurial Activity by Veteran Status: 1996-2011 (8 pages, PDF), veterans in the United States tended to start new firms at higher rates (between 0.26 percent and 0.37 percent) than non-veterans (between 0.27 percent and 0.34 percent) until 2009, when the percentage among non-veterans overtook that of veterans. In 2011, 0.30 percent of veterans created a new business, compared with 0.32 percent of non-veterans.

The report also found that the share of veterans among all new entrepreneurs has been declining steadily over the last fifteen years, from 12.3 percent in 1996 to 6.0 percent in 2011. While some of the decline can be attributed to declining entrepreneurship rates among veterans and a slight increase in rates among non-veterans, the primary cause appears to be the shrinking share of veterans in the working-age population.

"Because falling veteran entrepreneurship rates are due primarily to the aging vet population, the downward trend does not mean this important demographic group does not have an interest in starting companies and working to see those companies perform well," said Dane Stangler, director of research and policy at the Kauffman Foundation. "However, what's troubling about the waning numbers of veteran-owned startups is that younger veterans now have less support from within their own community of veterans as they consider their own entrepreneurial ventures: fewer networking opportunities, mentors and funders among the older generations of vets. What we don't yet know is how this may affect younger veterans' pursuit of entrepreneurship."

"Veteran-Owned Startup Rates Declining Across America, According to Kauffman Report." Ewing Marion Kauffman Foundation Press Release 11/08/2012.