Top 20 Reasons Why High Tech Startups Fail

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CB Insights, a NewYork-based capital venture data intelligence provider, gathered slightly more than 100 “startup failure post-mortems” from high tech startup that failed over the last 2 years. The failure post-mortems were primarily written by startup founders describing why their companies didn’t succeed.

CB Insights dug deeper into the data behind the startups, including those that got acqui-hired, and found that failed startups typically die 20 months after raising financing and after having raised about $1.3 million.

CB Insights examined each failure post-mortem entry and compiled a “Top 20″ list of the most common reasons why technology startups fail. Their analysis also offers some deeper insights into the harsh realities of starting a high-growth tech business as well as a few lessons for entrepreneurs to learn from. CB Insights revealed that 42% of the participating startup founders cited lack of market need for their product as the reason of failure of their startup. Other top reasons for failure were lack of sufficient capital (29%), the assembly of the wrong team for the project (23%), and superior competition (19%).

The full report with CB Insights’ findings can be downloaded here (registration required). Each failure post-mortem entry can be viewed here.

Startup business failure stats