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.
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.
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.
Image credit: CC by Ivan