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

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