70% of all dead tech companies have been in the internet sector: CB Insights Report

Dead Companies

Default result of a startup is death. Every entrepreneur should be privy to this fact before taking the leap and this knowledge plays a role while building a venture. Startup failure confessions have revealed a lot and being open about such issues helps everyone. Two reasons why we don’t hear much about failures are:

  • Startup death is hard to identify (most of the dead are buried very quietly)
  • Survivorship bias reigns (we only hear about the successful ones)

CB Insights recently did a study on data on tech companies which died between 2010 and 2013 to see what we can learn about startup mortality:

  • This isn’t a big surprise but each year since 2010, 70% of all dead tech companies have been in the internet sector (other sectors being mobile and telecommunication, computer hardware, electronics and software).

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  • 55% of failed startups raised $1M or less, and almost 70% companies died having raised less than $5M overall. Many startups die because of a lack of runway owing to limited funds.

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  •  71% of the dead companies lasted less than two years after their last funding round.

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Read more about the report here. For more India specific data and research on startups, head to research.yourstory.com and subscribe to the YourStory newsletter for a regular dose of startup news.

Jubin Mehta

Jubin Mehta

Jubin is an old timer at YourStory. Deeply entrenched in the Indian startup ecosystem, he has written about more than 1000 startups. With an engineering background and a keen interest in data analysis, his passion for writing and entrepreneurship makes him a perfect match for Yourstory. He operates from the mountains in Dharamshala where he also runs a hackbase. He can be reached on Twitter @jub_in and on mail at jubin@yourstory.com