Survival Rate of Acquired Businesses: The Real Gap.

The famous comparison that was never a comparison.

You will often read that ninety per cent of startups fail while eighty per cent of acquired businesses last five years. However, those figures come from different datasets measuring different populations. Nobody compared them directly. So any claim about startup failure rate vs acquisition built on them is a sentence, not a finding. The chapter was nearly built on that number before it got checked.

What the survival rate of acquired businesses really shows.

The French government measured both groups across 2012 to 2021, using three-year survival. Transferred businesses survived at eighty-five and a half per cent, while new ones reached eighty-one point four. So do bought businesses last longer? Yes, but by four points, not ninety against twenty. Also, academic work on two large French datasets finds the gap narrows over time.

Part of the advantage belongs to the buyer.

That academic work also finds the gap partly disappears once founders and firms are accounted for. In short, some of the advantage is not the buying, it is the buyers. People with capital and experience tend to buy, and they were likely to do better anyway. Therefore, buying gets you a slightly better base rate and a different risk. Instead of risking that nobody wants it, you risk that you cannot run it.