Tag Archives: Venture capital

Why start-up companies fail

Recent research from Toronto-based The Impact Group has identified key determinants why early stage and start up research and development companies fail. I attended a small group briefing in London by one of the lead researchers, Dr Jeffrey Crelinsten, and which offered an opportunity to consider wider implications of their findings.

Key factors identified for failure included:

  • no revenue from any customers, failure to identify or engage with customers
  • misreading markets, either overly optimistic market metrics or weak/ineffective market entry strategies
  • product not needed or failed to identify clear applications
  • longer than expected research/development phase
  • lack of skilled management team and poor company governance, and lack of business experience
  • no sense of urgency, and
  • greed.
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