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I doubt that is true, do you have numbers for this claim? I see many companies founding limited structures (UG or GmbH) to have avoid maximum personal risk. It can be done with just 1€ of capital.

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You still need liability capital for a GmbH (e.g. LLC) which most start-ups just don't have. They start off single or as a GbR with a second or more partners, and then eventually change the company liability type to GmbH, when they generated the capital needed. A real start-up doesn't have to be a GmbH at all. In fact about 2/3 are single start-ups in Germany with maximum personal risk, not even GbR which is only 8%. The rest are GmbH with 30% which also counts start-ups with a bigger company as backer.

That paper is a bit dated, and in German, but still the general assumption that most start-ups are poor remains true for Europe, not only Germany. https://www.destatis.de/DE/Publikationen/WirtschaftStatistik...

What is true though, a UG (e.g. Ltd), is an alternative to GmbH in terms of liability and capital. The 1 euro capital is a joke, imho. Because no sane credit institute would lend you money when they see your tiny liability investment. However, it is possible to make your business legal and profitable, and then borrow some money. But, honestly, starting with literally nothing is like starting a new game at maximum difficulty and perma-death, and who does that in RL?

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