For Startup Success in 2015, Watch Out For These Top 20 Reasons for Startup Failure

January 2, 2015

2:30 pm

For most, startup failure is inevitable. It’s a harsh reality to face, but it’s a reality that you have to acknowledge before fully jumping into the startup world. Resources vary, but anywhere between 70 percent to 90 percent of all startups eventually fail – that’s an extremely high rate of failure. Back in October of 2014, we shared with you a few stories from startup founders on why they believed their startups failed, and it seemed that failure can happen to literally anyone and for a plethora of reasons. Compiled by CB Insights, the stories serve as a valuable resource for startup founders. In an effort to provide founders with even greater insight, they parsed through each of the more than 100 startup failure post-mortems and pinned down the top 20 reasons for startup failure. If your goal for 2015 is startup success, then make sure to keep an eye out for these reasons for startup failure and make sure you safeguard your company where and when you can.

Looking at the data from CB Insights, the top three reasons startups can fail include: no market need, running out of cash, and not having the right team.  No market need is an obvious one; if you don’t even have consumers interested in or demanding whatever it is that you’re providing, then why did you bother with creating your company? Running out of cash can happen to anyone, but it takes skill to accurately predict your cash flow and spending – a skill that even the most brilliant minds in startups lack; even if your startup has gotten some funding, sometimes all it takes is a blink of an eye before that all disappears. What stands out the most is not having the right team. Even if you’ve got a great idea or product, it’s important to recognize that startup success is dependent on the people who are helping to build that product and business.

Check out all top 20 reasons for startup failure:

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Ronald Barba was the previous managing editor of Tech.Co. His primary story interests include industry trends, consumer-facing apps/products, the startup lifestyle, business ethics, diversity in tech, and what-is-this-bullsh*t things.

Aside from writing about startups and entrepreneurship, Ronald is interested in ‘Doctor Who’, Murakami, ‘The Mindy Project’, and fried chicken. He is currently based in New York because he mistakenly studied philosophy in college and is now a “writer”. Tweet @RonaldPBarba.

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