Most startups die 20 months after last funding round -research
On the average, startups will die 20 months after their last financing round, according to data gathered by New York research firm CB Insights (CBI). The firm has also gathered other interesting data on startup death, wrote VentureBeat.
CBI's research on startup death revealed that over half of early-stage companies die before they reach the $1-million mark in fundraising. Also, 70% die before they reach $5 million. Most startups that died raised an average of $11.3 million, with $1.3 million as median, the report detailed.
When classified according to sector, most dead tech startups were Internet-focused, CBI data showed. So, when there are more Internet firms that go after venture capital cash, it follows that there will be more dead Internet startups, the report said.
Lastly, CBI data revealed that most of the dead startups were focused on social. It is better for a tech company to avoid the social circle. The same thing is applicable to marketplace, advertising, sales, and marketing firms, the report added.
CBI is using these data to sell a list of tech companies headed to the graveyard, and each firm is being sold for almost $7,000. The research company says that list is valuable for those looking to scoop up new talent, products, or IP, VentureBeat reported.