Why do startups fail?

Updated: Aug 14, 2018

Here are 20 reasons that are common to startups which fail.

Startups have been the hyped-up success story of the past decade, with a few new companies not just hitting it big, but changing the face of business in the process. But for every successful startup, countless others fail, sometimes mysteriously and often unnoticed.

So what kills startups?

Research for this infographic was drawn from a CB Insights analysis, on the reasons behind the failure of 156 startups. CB Insights interviewed startup founders about why they failed, and sorted these reasons into 20 distinct categories. You’ll notice that the sum of the percentages exceeds 100%, because many startups fail for more than one reason.

While 156 companies might sound like a small sample group, other key figures in the startup field agree with these findings. Take Paul Graham, cofounder of the Y Combinator incubator and an investor who has funded more than a thousand startups, including Dropbox and Airbnb. Graham identifies some similar trouble spots and has this to say: "This is not a complete list of the causes of failure, just those you can control... this is a list of things that cause startups not to make something users want. Nearly all failure funnels through that."

Is your business vulnerable to one of these crucial missteps? Or is there something you’d add to our infographic? Let us know what you think!

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