Kauffman: Number of U.S. Companies that Reach $100-Million in Annual Revenues Remarkably Stable Over Past 20 Years

by Sabrina I. Pacifici on May 22, 2013

“The pace at which the United States produces $100-million companies has been stable over the last 20 years despite changes in the economy. However, according to a new Kauffman paper released today, the locations and sectors in which those companies are created are changing. In the paper, The Constant: Companies that Matter, Kauffman Foundation Senior Fellow Paul Kedrosky explores the rate and founding locations of companies in the United States that “matter” from 1980 to present. Kedrosky uses three criteria to define companies that matter: They must be scalable, quickly reaching $100 million or more in revenues; they must be able to generate jobs quickly and broadly; and, they must be disproportionate creators of wealth, both directly through profits and salaries and indirectly through equity. “Companies unable to reach $100 million in revenues are still relevant to the economy,” Kedrosky says. “But the $100-million firms meet an entirely different threshold that gives cities, states and countries an even greater economic advantage.” Anywhere from 125 to 250 companies per year (out of roughly 552,000 new employer firms) are founded in the United States that reach $100 million in revenues. The largest contributors, in percentage terms, are from the consumer discretionary and industrials sectors. Taking into account sectoral contribution to U.S. GDP, the information technology sector produces more $100-million companies than might be expected.”

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