Startup Failure Rates in 2025
Startups are hard. The data proves it.
If you're building a company in 2025, here's the uncomfortable math you're up against and why it should fuel your urgency, not your fear.
Failure is still the default
Some things never change.
Up to 90% of startups eventually fail
Even with money behind them, 75% of venture-backed startups fail
Founders don’t always understand how steep the curve really is. Most aren’t planning for this level of attrition or operating with the urgency it demands.
Why startups fail
It’s rarely just bad luck. I only believe startups fail for two reasons, but let’s get granular. The most common causes are entirely preventable:
These aren’t just stats. They’re early warnings. If you’re seeing any of them in your own company, take action now.
Money doesn’t solve everything anymore
From 2013 to 2021, you could throw money at almost any problem. Raise another round. Hire your way out. Buy growth.
That era is over.
Global venture funding dropped 38% in 2023 — the lowest level since 2018
In the US, startup capital shrank by 30% year-over-year
The number of new funds being raised is down 68% from its 2021 peak
VC distributions — the cash investors return to LPs — dropped 84% over two years
The message is clear: You can’t count on capital to cover weak strategy, a poor product, or slow execution.
Founders today have to win with discipline, not just dollars.
What this means for founders
The biggest mistake is assuming you have time. Startups don’t usually die because of a single catastrophic event.
They die because of slow decay: delayed decisions, ignored issues, postponed pivots, and half-hearted hustle.
Treat these stats like a checklist. Audit your company against them. Then move faster than the averages.
Need a wake-up call? Read ‘Assume your startup will die’ and why fighting to stay alive might be the best mindset you can have.