[byoung2]

Tech startups are a special breed of company in that they are very inexpensive to start (sometimes all you need is a laptop, a server, and an internet connection), they can run leaner than other types of businesses (ramen, hosting, and lots of Mountain Dew), and they can scale very easily from a handful to hundreds of thousands or millions of customers (open source and Amazon AWS).

Contrast that with other business types included in those SBA figures, like restaurants and liquor stores. Those businesses start out in debt because of leasing costs, equipment purchase, payroll, licensing, insurance, etc. It is also much harder to scale a restaurant than a website or app (because of geography).

[_delirium]

The ready availability of funding plays a role as well. The 80% figure isn't for startups that actually achieved profitability, but for startups that achieved more funding. VCs aren't as willing to fund unprofitable restaurants.

Whether that's due to real promise of future profitability, versus a funding bubble, is something to judge in hindsight. ;-)