A new report from the Ewing Marion Kauffman Foundation provides compelling insights into what it takes to spawn and nurture new companies. The survey tracks 5,000 new companies that were founded in 2004. Some highlights:

• About a third of the startups had no revenue during their first year. Forty-five percent achieved profitability in the first year.
• Eighty percent got equity investment during the first year, but in most cases that money came from the owners themselves. Only 10% of the companies reported getting outside equity, and in most cases it came from the owners' parents or spouses. Venture capitalists were involved less than 1% of the time during the first year.
• Nearly half of the businesses were started in the owners' homes or garages.

Not surprisingly, most of the companies that secured patents during their first year were high-tech startups. But even then, only 4.1% of these young tech companies had done so. - Olaf de Senerpont Domis

See March 2008 report from Kauffman Foundation