Startups fail primarily because they build products the market doesn't want, run out of cash, or hit unrecoverable conflict among the founding team. According to CB Insights' ongoing analysis of hundreds of startup post-mortems, these are the top three causes (with the cash failure typically meaning before reaching profitability or the next round). Roughly 70 percent of venture-backed startups shut down or fail to return capital within their funding lifecycle, and survey-based long-term failure rates run closer to 90 percent.
CB Insights' "Top Reasons Startups Fail" report, drawn from founder post-mortems, has consistently ranked "no market need" as the most-cited cause of failure, appearing in roughly 35 to 42 percent of ...