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Startup Death Trends


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Despite high hopes and big-name investors many startups fall short of the initial public offering or acquisition finish line and eventually fail.

To learn a little bit more about startup mortality CB Insights, a venture capital and angel investment database examined tech companies that failed between 2010 and 2013 and published the results in a new report.

CB Insights noted that startup death is very hard to identify.

“Many startups are essentially dead but limp along for years in zombie-like fashion. So although on life support, these walking dead startups are not included in this analysis since they’re not officially deceased,” according to the report.

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These companies, most of which are in the Internet sector, lasted an average of 20 months after their last funding round before biting the dust. “Acquir-hiring” takes considerably less time—an average of 14 to 15 months after the last round.

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More than half wind down before raising even $1 million. Big-dollar deals skew the average funding raised, which stands at $11.3 million. The median amount raised comes in at $1.3 million.

Reprinted by permission.

Image credit: CC by Ivan

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About the author: Katie Little

Katie Little is a Business Journalist at CNBC and graduate of University of North Carolina at Chapel Hill.

  • http://sundownrundown.org SunDownRunDown

    Isn’t this a good thing? Fail fast and fail cheap (i.e under $1M for 55% of the surveyed firms) If anything this builds a case for better milestones and capital access plans to get from point A to point B and then only have funds be released once certain milestones are hit.

  • Rajkanwar Batra

    I would agree.

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