Survival rate
The share of a group that is still going after a given time, such as businesses still open after five years. Usually shown as a curve that falls over time.
In plain English
A survival rate needs three definitions: who is in the group, what counts as the end, and how long you wait. Survival curves often fall fastest at the start, because the weakest members drop out early and the ones left are, on average, sturdier. That's why 'how many fail' without a time period means very little.
Uncle Gary explains
About 20% of new US business establishments close in their first year, about half within five years and about two-thirds within ten. The famous '90% of startups fail' has no clear source.
Why it matters for your money
Fund statistics often leave out funds that closed, which are usually the worst. A survival rate tells you how many disappeared before the averages were taken.
Where we tested it
- Do 90% of Startups Fail? It Depends What You Count
- The Lindy Effect: Why Nothing Is More Permanent Than a Temporary Fix
Related terms
All glossary terms. Educational content, not financial advice.