Startup Business Owners Optimistic About Growth in 2013, Kauffman/LegalZoom Index Shows

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Justin O'Neill, 415-844-6261,
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Barbara Pruitt, 816-932-1288,, Kauffman Foundation

Entrepreneurs' confidence reaches the highest level since the quarterly survey was initiated

(KANSAS CITY, Mo.) April 30, 2013 – Early-stage business owners' confidence is climbing, according to the first-quarter 2013 Kauffman/LegalZoom Startup Confidence Index, released today by the Ewing Marion Kauffman Foundation and LegalZoom.

Eighty-four percent of entrepreneurs said they are confident or very confident in their companies' prospects for profitability in the next 12 months, which is the highest confidence level since the survey launched early last year and reflects a 1 percent increase over the fourth-quarter 2012 survey. Furthermore, confidence levels of the youngest entrepreneurs – those 18 to 30 years old – started to rebound, as 96 percent reported they were confident or very confident that their businesses' profitability will increase in the year ahead, a 3 percent jump over fourth quarter 2012.

"The findings of this survey from quarter to quarter provide an important gauge for entrepreneur sentiment, which plays a significant role in their business decisions," said Dane Stangler, director of research and policy at the Kauffman Foundation. "This also is a way to give entrepreneurs, who are as diverse as their companies, a collective voice."

Confidence levels among other age groups fell as the entrepreneurs' ages increased. Nevertheless, even entrepreneurs aged 61 and older – the oldest category – expressed 73 percent confidence in 2013 profitability.

"These reports continue to benchmark entrepreneurial confidence across the country," said John Suh, CEO of LegalZoom. "They also provide a more granular feel as to how an entrepreneur's experience with consumer demand and perceived outlook on the economy may impact the decision to hire."

Despite their optimism for their own companies' profits in the year ahead, entrepreneurs' faith in U.S. economic growth deteriorated from fourth quarter 2012. Just 39 percent said they expected the economy to improve over the next 12 months, compared to 44 percent in the previous quarter's survey.

The number of entrepreneurs planning to hire more employees also declined. In fourth quarter 2012, 37 percent of the respondents planned to hire. In the most recent survey, only 32 percent expected to hire more employees in the next 12 months.

Entrepreneurs' outlook for consumer demand dipped with 44 percent expecting an increase in customer demand, down from 45 percent in the previous survey.

The Kauffman Foundation sponsors the Startup Confidence Index surveys in conjunction with LegalZoom, a leading national provider of online legal solutions and legal plans to young companies.

The findings are based on 1,650 responses to a nationwide, February 2013 survey distributed via email to LegalZoom customers who formed their entities within the last 12 months. The Index is conducted quarterly to gauge entrepreneurial confidence.

View the Kauffman LegalZoom Startup Confidence Index infographic. Follow the conversation online at #startupconfidence.