> Cambridge Associates, a global investment firm based in Boston, tracked the performance of venture investments in 27,259 startups between 1990 and 2010. Its research reveals that the real percentage of venture-backed startups that fail—as defined by companies that provide a 1X return or less to investors—has not risen above 60% since 2001. Even amid the dotcom bust of 2000, the failure rate topped out at 79%.
I am wildly skeptical of these numbers, and could not find the actual study after a quick search on Google. It seems to ignore seed investments for starters, and many "exits" (acquihires) aren't public information, so how they quantify this is ambiguous.
If we consider a startup to begin when someone decides to quit their job and work on it full-time and a successful exit as a positive ROI to most investors in less than 10 years, I'd estimate the number as closer to 99% (most people never get any funding for their startups at all). Of course, I have no hard numbers to back that up.
It would be hard to really quantify. You have everything from worked nights and weekends for a year and nothing ever came of it to acquihires with a nice but modest payout to breakeven acquisitions to IPOs or other big exits. I'm sure if you include friends & family money (or personal money) and sweat equity the failure rate goes way up.
I am wildly skeptical of these numbers, and could not find the actual study after a quick search on Google. It seems to ignore seed investments for starters, and many "exits" (acquihires) aren't public information, so how they quantify this is ambiguous.
If we consider a startup to begin when someone decides to quit their job and work on it full-time and a successful exit as a positive ROI to most investors in less than 10 years, I'd estimate the number as closer to 99% (most people never get any funding for their startups at all). Of course, I have no hard numbers to back that up.