Americans are starting businesses at a record pace — an entrepreneurial hot streak that helps set the U.S. apart from the rest of the global economy.

Why it matters: The strong pace of new startups in the years since the pandemic likely plays a role in U.S. economic resilience and dynamism.

• It's amplified by AI, which gives the smallest startups new capabilities that once required much larger operations.

The big picture: Small businesses employ about half of the American private-sector workforce. So far this year, the nation's smallest businesses are doing the bulk of hiring.

• Through the first four months of 2026, the smallest companies — those with fewer than 20 employees — added 236,000 jobs, per payroll processor ADP. That accounts for a whopping 95% of the economy's net gains over that period.

What they're saying: "You rarely find a large business that just appears out of nowhere with hundreds, if not thousands, of employees," Holly Wade, executive director of the National Federation of Independent Business, a small business lobbying group, tells Axios. "They start off small."

By the numbers: Americans are filing paperwork to start new businesses at near-record rates — averaging 470,000 applications a month in 2025. That's about 66% above pre-pandemic norms.

• Residents in Bexar County filed more than 29,600 business applications in 2025, per the latest Census Bureau data. That's a 64% jump from 2019.

Yes, but: Nationally, would-be entrepreneurs filing applications with planned wages — meaning they intend to take on employees, the surest sign of a real, lasting company — fell back to pre-pandemic levels in 2025 and are tracking even lower this year.

• That means the startup surge is increasingly composed of solo operators rather than businesses with plans to hire. AI tools may be enabling this.

What we're watching: The White House is betting AI will be the "great equalizer," Trump's top economist Kevin Hassett tells Axios.

• "It's making it so that small businesses who start to use AI can compete better with big businesses," Hassett says.

The pandemic may have touched off a historic startup boom, but many of those new businesses have struggled.

State of play: Among the new businesses started in 2022, an above-average share shuttered within three years, according to government data.

• Those businesses launched on the assumption that low interest rates and strong demand would last. But they got hit right out of the gate with rapid rate hikes and an inflation shock.

The latest: Confidence among small business owners fell below historical norms in March in the wake of the Iran war energy shock, according to a survey by the National Federation of Independent Business that has been conducted for the last 50 years.

📧 Tell us: Have you recently started a business in the San Antonio area? What is it like being a new entrepreneur in this time?

• Hit reply to let us know. Your response may be featured in a future newsletter.

🎬 UT San Antonio is launching a Master of Fine Arts program in Film and Media this fall to support the city as a growing film destination amid new tax incentives. (UT San Antonio)

💰 The City Council unanimously approved nearly $143 million in incentives aimed at convincing Toyota to build a $2 billion assembly plant on the South Side. (KSAT)

🏊 Visitors from outside San Marcos now must pay $5 to access the river at Rio Vista Park on weekends and holidays during the summer. (MySA)

The largest ownership transition in American history is quietly underway: Baby boomers are retiring, and no one knows who — if anyone — will take over their small businesses.

Why it matters: Baby boomers own about a quarter of all small businesses, about double the share held by their predecessors 20 years ago, McKinsey estimates.

• Their children often don't want to take over the family business. The risk is those firms close instead of selling to a capable investor, slowly wiping out jobs and economic anchors in communities across the country.

By the numbers: About 6 million businesses with fewer than 500 employees will face ownership transitions between now and 2035 as owners retire, up from about 4.5 million in the prior decade, per McKinsey.

The bottom line: Millions of small businesses will soon face a moment of truth: Find a successor or a buyer — or close.

Every day, we work to bring you the local stories, insights and updates that help you stay connected to your community.

📍 Become a member today. Your support helps us continue delivering trusted local reporting and keeps our newsroom focused on the stories that matter most.

Help keep local journalism strong where you live.

Immigrants play an outsized role in entrepreneurship, launching more than 20% of U.S. businesses while representing just 15% of the population, according to a National Bureau of Economic Research paper published in 2024.

• About 3.5 million immigrants are self-employed, according to the Immigration Research Initiative.

Zoom in: The difference is even starker in San Antonio, where 24% of the metro area's business owners are immigrants — despite making up just 13% of the population, per a January report from the American Immigration Council commissioned by the city.

State of play: Immigrants or the children of immigrants founded nearly half of Fortune 500 companies as of 2023, according to one analysis.

• Those include Jensen Huang's Nvidia, Elon Musk's SpaceX and Tesla and Sergey Brin's Alphabet.

What we're watching: Mass deportations and stiffer immigration restrictions could undermine small businesses, as entrepreneurs fret about their own residency, face expensive visa rules and struggle to retain foreign-born employees.

Go deeper: How tariffs and immigration hit San Antonio's Silk Road