Pre-Seed vs Series A: Failure Rates at Every Stage

The journey from idea to IPO is full of roadblocks. Many startups fail at different stages—and most don’t even make it past the beginning. This guide dives deep into the failure rates at every level, from pre-seed to Series A. Each section covers a key stat, breaks it down simply, and shares useful steps to help founders avoid becoming another number in the pile of startup failures.

1. 90% of startups fail overall

Why most startups never make it

Startup failure is not the exception—it’s the rule. For every success story you hear, there are countless others that didn’t make it past the early days. A staggering 90% of startups eventually shut down. That means only 1 in 10 survive the grind long enough to call themselves sustainable.

It might sound like a harsh number, but it’s a reality check. Startups fail for many reasons—bad timing, poor planning, weak execution, or just bad luck. But knowing this stat upfront can actually help founders plan better and build smarter.

What makes the 10% succeed?

The rare few that do survive often have a few things in common:

A strong founding team with clear roles
A clear and painful problem they’re solving
The right timing in the market
Deep customer understanding
A lean, adaptable approach to growth

These aren’t buzzwords—they’re the bare minimum.

Actionable advice

Validate before you build: Talk to your potential customers before writing a single line of code. Find out if they really care about the problem you’re solving.
Cut the fluff: Don’t waste time on branding or building the “perfect” product early on. Focus on usefulness.
Build a strong team: Solo founders have it rough. If possible, build with people who complement your skill set.
Use lean methods: Start with the simplest version of your product and test it with real users fast. This avoids wasting time on features no one wants.
Understand your numbers: Keep an eye on your burn rate. Money management is often the difference between survival and shutdown.

2. ~42% of startups fail due to no market need

The most common killer: building something no one wants

Almost half of startups fail because their product doesn’t solve a problem people care about. It’s tempting to think your idea is great. You’re passionate about it. You’ve envisioned the logo, the app design, the launch party.

But if the market doesn’t care, none of that matters.

Many founders skip customer validation. They assume their solution is good because it makes sense to them. But customers aren’t just looking for “cool”—they want useful, easy, and fast solutions to real problems.

How to know if there’s real demand

Before you build, do this:

Talk to at least 50 people in your target market
Ask open-ended questions about their daily frustrations
Look for existing solutions they’re already paying for
Identify if they’re actively searching for better options

If you hear things like “I’d pay for that right now” or “I’ve been looking for something like this,” you’re on to something.

If not, it’s time to adjust.

Actionable advice

Run customer interviews early and often: Don’t lead with your solution. Just ask about their problems.
Use landing pages to test interest: Set up a simple page describing your product and see if people sign up. Run ads to gauge traction.
Avoid building in a vacuum: Constantly bring your idea back to the market. Talk to users, even if it’s uncomfortable.
Track signal, not noise: Likes and shares don’t equal demand. Look for sign-ups, email replies, and willingness to pay.
Stay flexible: If you find the market doesn’t want what you’ve built, don’t be afraid to pivot.

3. Only 1 in 10 startups make it past the pre-seed stage

The silent graveyard of startups: pre-seed stage

Pre-seed is where dreams begin—and most end. At this stage, startups are just starting out. Maybe there’s a prototype. Maybe just a pitch deck. But what’s clear is this: 90% don’t make it to the next round.

This isn’t just about getting funded. It’s about proving your idea has legs. Most fail here because they underestimate how hard it is to go from idea to something users want.

It’s a time full of uncertainty. Founders are often juggling day jobs, unsure how to reach users, and running out of savings. Without a clear path to validation, they burn out or run dry.

Why the leap from pre-seed is so hard

Here’s what usually goes wrong:

Not enough focus on customer discovery
Weak MVPs that don’t solve a specific problem
No traction or data to show investors
Poor storytelling or a scattered pitch
Founders giving up too soon

Getting from pre-seed to seed requires more than passion. It takes grit, clarity, and consistent execution.

Actionable advice

Build your MVP with precision: It doesn’t need to be fancy. It just needs to solve one painful problem, well.
Document early traction: This can be email signups, user interviews, pre-orders, or even LinkedIn messages from interested users.
Craft your story: Investors want a clear, compelling vision. Practice your pitch until it flows naturally.
Find mentors early: Someone who’s a few steps ahead can save you months of wasted time.
Break down your goals: Don’t think in “raising a seed round.” Think in “get 10 users,” then “get 50,” then “get 1 paying customer.”

4. About 60% of pre-seed funded startups fail before reaching seed stage

Funding is not a guarantee of progress

Getting pre-seed money can feel like a huge win—and it is. But here’s the tough truth: 60% of startups that receive pre-seed funding still fail before they ever reach the seed stage. That means even with capital in hand, most startups don’t make it.

Why? Because money alone doesn’t solve the hardest parts of early startup life. It can help you move faster, but if you’re headed in the wrong direction, you just crash sooner.

The common pitfalls after raising pre-seed

Once the check clears, many founders shift their focus from building to scaling too soon. They hire before they validate. They focus on metrics that don’t matter. Or they start building complex features instead of fixing the core problem.

The biggest challenge post-pre-seed is execution under pressure. You have limited time and investor expectations to meet. If you don’t hit early milestones, follow-on funding becomes nearly impossible.

Actionable advice

Stretch your funding: Act like you’re still bootstrapping. Keep your burn rate low and use money where it makes the biggest difference.
Focus on traction metrics: Don’t obsess over vanity numbers. Prioritize actual usage, retention, and engagement.
Build trust with your investors: Keep them updated. Share wins, setbacks, and how you’re adapting. Many investors help most when they see you’re transparent.
Avoid hiring too soon: Keep your team lean. Only bring on talent when there’s a clear ROI from that hire.
Set tight, measurable goals: Break down the next three months into weekly milestones. Focus on learning fast, not just building.

5. Roughly 70% of seed-funded startups never make it to Series A

The seed-to-Series A gap is wider than it seems

You’d think that once a startup raises a seed round, it’s smooth sailing to Series A. But about 70% of seed-funded startups never get there. That’s a huge drop-off.

It’s not because they didn’t have potential. It’s often because they couldn’t prove that the business was scalable. Seed money is meant to help you find product-market fit. If you can’t show investors that you’ve found it—or at least that you’re close—they won’t fund the next step.

Why startups stall at this stage

Many startups use their seed round to polish the product, build features, or hire. But if they don’t build a growth engine during that time, they run out of both momentum and money.

Founders also face a mental shift at this stage. Early hustle needs to turn into operational clarity. Investors are now looking for proof: repeatable acquisition channels, strong retention, early revenue growth.

Without that, it’s hard to justify Series A funding.

Actionable advice

Start thinking like a Series A company early: Begin tracking key metrics like CAC, LTV, churn, and retention—even if they’re messy.
Find your best acquisition channel and double down: Don’t spread yourself thin. Focus on what’s working and scale it.
Systematize what works: If you find a playbook for customer success or growth, document it and make it repeatable.
Build a solid data room: Make it easy for investors to see your traction and understand your decisions.
Tell a growth story: Investors want to hear a story of momentum. Frame your progress in terms of learning, pivots, and growth.

6. Only ~10–15% of startups that raise a pre-seed round eventually raise a Series A

The pre-seed to Series A path is a marathon

Let this sink in: just 10 to 15% of pre-seed funded startups raise a Series A. That’s a long road of hurdles, tough decisions, and make-or-break moments.

Most startups get stuck somewhere in the middle. Some raise a small seed and plateau. Others run out of steam. And many fail to show investors that they’ve built something worth scaling.

This stat shows how rare it is to make the full leap. From pre-seed to Series A, it’s not just about building a product—it’s about proving that your entire business model can grow.

What Series A investors want to see

At Series A, the bar is high. Investors want:

Strong product-market fit
Clear user growth or revenue growth
Repeatable acquisition channels
A data-driven approach
A confident, clear narrative

If your pre-seed and seed efforts didn’t get you to that level, Series A will feel out of reach.

Actionable advice

Track investor-grade metrics early: Understand what matters to Series A investors in your industry and start measuring it now.
Don’t chase every opportunity: Focus on one core product and make it excellent. You can’t afford distractions.
Prove retention before growth: If users don’t stick around, it doesn’t matter how many sign up. Fix churn before scaling.
Refine your pitch over time: Your pitch should evolve as you learn more about your market. Practice it with people outside your startup world.
Stay disciplined: The journey from pre-seed to Series A takes 18–24 months. Keep your team focused and aligned on long-term goals.

7. Pre-seed startups have a failure rate exceeding 85% within the first two years

Why the first two years are brutally hard

Pre-seed startups are the most fragile type of business. In the first two years, more than 85% of them shut down. That’s not just high—it’s nearly everyone. This stat highlights the brutal nature of the early days.

During this time, founders are juggling idea development, market discovery, team formation, product building, and sometimes even other jobs. There’s very little room for mistakes. And with limited funding, one wrong turn can be fatal.

It’s a pressure cooker, and most startups crack under it.

The pressure points in year 1 and year 2

Year 1: Most startups fail here due to unclear market needs, poor execution, or internal conflict. Founders get overwhelmed, funding dries up, and progress stalls.
Year 2: The ones that survive year 1 often face a different problem—growth. If you don’t show traction by now, investors will walk. This is when you either scale or fade out.

It’s also when emotional burnout kicks in. Founders feel isolated and exhausted, especially when expectations don’t match reality.

Actionable advice

Treat your first two years like a lab: Focus on testing, learning, and adapting. Don’t expect a perfect product—just make sure it’s moving forward.
Log every major decision: Having a log helps you avoid repeating mistakes and shows investors you’re methodical.
Keep your team small and aligned: You don’t need five engineers right now. You need one builder and one thinker with shared goals.
Avoid chasing trends: Stick to your lane. Don’t pivot every month because something new is trending on Twitter.
Create a founder support system: Talk to other founders regularly. Don’t build alone in the dark—it increases the chance of burning out.

8. Series A companies still face a ~30–50% failure rate

The risk doesn’t end after Series A

You’d think raising a Series A round means you’ve made it. But here’s a reality check—30 to 50% of startups that raise a Series A still fail. And when they do, it’s often after investing heavily in growth, teams, and infrastructure.

The pressure at this stage is different. You’re expected to scale—and fast. But if your foundation isn’t solid, that push for growth can break your company.

What typically causes post-Series A failure?

Scaling too early or too fast
Ignoring operational efficiency
Hiring for speed, not skill
Overestimating the market size
Poor financial planning

At this point, expectations are sky-high. Investors want to see exponential growth. If your growth stalls, or you lose focus, the funding stops. And without more runway, even a Series A company can collapse.

Actionable advice

Build a strong ops layer: You need systems now. Start thinking like a real company—use project management tools, hire operations roles, and organize your workflows.
Watch your cash flow like a hawk: Growth can drain cash. Plan detailed monthly forecasts and review them constantly.
Invest in data: You can’t grow what you don’t track. Make data a central part of how your team operates and makes decisions.
Keep your early culture alive: Don’t let process replace passion. Stay close to your customers even as your team grows.
Don’t scale chaos: Fix your churn, bugs, and onboarding flows before you triple your user base.

9. On average, it takes 18–24 months to move from pre-seed to Series A

Patience and planning are key

The jump from pre-seed to Series A takes around 18 to 24 months on average. That’s longer than most founders expect. Many think they can rush from idea to big funding in a year or less—but that’s rarely how it goes.

This timeline exists for a reason. It takes time to build, test, adjust, and prove. Startups that try to force the process often cut corners, miss important learning moments, and fail to show real progress.

This window is not just about surviving—it’s about becoming fundable.

What you should be doing during this window

The timeline looks something like this:

Months 0–6: Idea validation, early MVP, problem discovery
Months 6–12: Product-market fit testing, first traction
Months 12–18: Refinement, growth experiments, revenue starts
Months 18–24: Build Series A narrative, clean up financials, pitch to investors

If you skip steps or rush through them, you risk not having enough proof when it’s time to raise Series A.

Actionable advice

Set quarterly milestones: Don’t just “work hard”—know what you need to accomplish every 3 months.
Document traction clearly: You need a trail of progress—user metrics, testimonials, revenue growth, churn improvements.
Raise smart, not fast: Don’t burn your investor network before you’re ready. Time your Series A pitch when your story is strong.
Build your A-round story over time: Don’t wait until month 18 to start thinking about the pitch. Let your milestones shape your story as you go.
Make investor updates a habit: Send monthly or quarterly updates to pre-seed investors. They might be the ones to open doors when you’re ready for the A round.

10. 30% of startups fail due to running out of cash

When the money runs out, it’s game over

A full 30% of startups fail simply because they run out of cash. It sounds obvious, but this is one of the most preventable causes of failure. Running out of money isn’t always because the business didn’t work—it’s often because of poor planning, overspending, or slow decision-making.

Startups usually operate with tight margins and limited revenue. If you don’t know exactly how much money you have, how long it will last, and where it’s going, you’re setting yourself up for a crash.

The most common cash flow mistakes

Over-hiring early
Spending on growth before proving the model
Not cutting costs fast enough
Poor fundraising timing
Underestimating how long things take

Even great ideas can fail when the bank account hits zero.

Actionable advice

Know your runway: Calculate how many months you can operate at your current burn rate. Always know this number.
Create a simple financial model: Even a basic spreadsheet that tracks expenses, income, and projections can save your startup.
Delay fixed costs: Hire contractors instead of full-time staff early on. Don’t commit to long-term expenses too soon.
Raise before you need it: Don’t wait until you’re desperate. Fundraising takes time and gets harder when you’re low on cash.
Trim ruthlessly when needed: If you’re not hitting traction, cut back. Buying time often saves your business.

11. Only about 25% of startups that raise seed funding go on to raise Series B

The gap between Series A and B is steep

So you’ve raised a seed round. You even managed to land a Series A. But only 1 in 4 startups ever raise a Series B. That’s a sharp drop, and it shows just how difficult sustained growth can be.

By this stage, the expectations shift from experimentation to execution. Investors now want to see strong unit economics, repeatable sales processes, and a clear roadmap to profitability. You’re no longer just a promising startup—you’re expected to operate like a real business.

Why startups stall before Series B

Can’t maintain growth rates
High churn or low retention
Unit economics don’t scale
No clear expansion strategy
Product still feels incomplete

If your Series A was about proving traction, your Series B is about proving the engine can scale without breaking down.

Actionable advice

Make retention your north star: If people aren’t sticking around, nothing else matters. Fix this before focusing on new customer growth.
Build out customer success early: A smooth onboarding process and strong support team drive retention and referrals.
Document your sales process: As you grow, you’ll need to hand this off. Make it repeatable and easy to train others on.
Track cohort behavior: Not all growth is good. Know which user segments bring long-term value and which ones burn out.
Prepare early for Series B: Start building relationships with Series B investors well before you need them. Keep them in the loop with key wins.

12. The survival rate from pre-seed to exit (IPO or acquisition) is estimated to be less than 1%

The long road from idea to exit

Here’s the cold truth: fewer than 1% of startups that raise pre-seed money go on to exit through IPO or acquisition. That means 99% don’t get that big payoff you hear about in tech news.

This stat reminds us that building a startup is not just hard—it’s extremely rare to finish the race. Many factors are out of your control: markets change, competitors pivot, investor appetite shifts. But most of the battle is in execution, focus, and staying alive long enough to matter.

Why so few reach the finish line

Burnout and founder fatigue
Market shifts or timing issues
Product never truly fits the market
Failure to scale after Series A
Acquisition doesn’t materialize

Also, exits take time—often 7–10 years. If you’re not ready for the long haul, the odds are stacked even higher against you.

Actionable advice

Build a business, not just a pitch: It’s easy to get caught up in funding rounds. But exits only happen when you build real, sustainable value.
Have clear exit thinking—but stay flexible: Know if your market lends itself to IPOs or M&A, and build accordingly.
Keep your cap table clean: Too many small investors or messy early deals can kill acquisition deals later.
Develop real relationships with potential acquirers: Stay on their radar. These relationships often take years to pay off.
Focus on profitability early: Even if you’re not there yet, being on the path toward it makes you a stronger exit candidate.

13. Among startups that raise Series A, approximately 60% raise Series B

Series A success doesn’t mean Series B is guaranteed

Once you raise a Series A, you’re on a tightrope. Only 60% of those startups go on to raise a Series B. While that’s better odds than at earlier stages, it’s still a big drop-off—and the pressure gets more intense.

By this point, you’re not just proving your product works. You’re proving that your business model is scalable. Series B investors aren’t betting on vision anymore—they’re betting on execution, systems, and numbers.

What separates the 60% from the 40%

Those who raise Series B successfully usually have:

Strong year-over-year revenue growth
Solid retention and expansion metrics
Repeatable go-to-market strategies
Tight financial operations
A high-performing team beyond the founders

The others often stall because they didn’t transition from founder-led hustle to systems-led scaling.

Actionable advice

Start acting like a Series B company early: Put processes in place, hire experienced leaders, and begin thinking about org structure.
Build dashboards that tell a story: Don’t drown in data. Build dashboards that track your most important KPIs and make your growth story obvious.
Invest in middle management carefully: Great managers help your team scale without losing speed. Avoid bloating the org too fast.
Audit your customer journey: From awareness to onboarding to expansion, map it out. Tighten every step.
Don’t plateau on growth: Keep experimenting with channels. If you’re coasting, it’ll show—and investors will walk.

14. Only 20% of Series A startups eventually reach Series C

Series C is rarefied air

If you’ve reached Series A, you’re ahead of most startups. But only 1 in 5 of those make it to Series C. That makes Series C a level very few ever see.

Why? Because Series C is about dominance. Investors at this stage want to see not just product-market fit or early traction—they want to see leadership in a market. They want to back winners with proven performance.

By Series C, your company should be firing on all cylinders, growing rapidly, and beating competitors.

Why most startups don’t get there

Growth slows too early
Team can’t scale operations fast enough
Poor unit economics at scale
Founder struggles with leadership at scale
Missed timing in the market

Series C investors are betting on you to go public or get acquired for big money. If your numbers don’t support that, it’s game over.

Actionable advice

Act like a category leader: Define your space. Own the narrative. Set the terms of the conversation in your industry.
Run quarterly financial reviews: Get obsessed with margins, burn, CAC, LTV, and payback period. Investors at this level dig deep into your metrics.
Invest in your leadership team: Founders alone can’t carry the load. Hire experienced executives who’ve scaled companies before.
Optimize every stage of the funnel: From lead gen to expansion revenue, remove friction. Focus on conversion and activation.
Build PR and visibility: At this stage, brand and perception matter. Investors want to back companies people talk about.

15. Pre-seed startups with solo founders have 25% higher failure rates

Going solo is a tough road

Founding a company alone is incredibly difficult. According to data, pre-seed startups with solo founders fail 25% more often than those with at least one co-founder.

Why does this happen? It’s not always about skill—it’s about bandwidth, support, and decision-making. Founders who go it alone have to do everything themselves: product, fundraising, hiring, marketing, and support. It’s overwhelming, and it leads to burnout fast.

Why co-founders improve the odds

Shared workload
Better decision-making through debate
Emotional support in tough times
Complementary skills
More attractive to investors

Having a strong co-founder means you move faster and reduce the weight on any one person’s shoulders.

Actionable advice

If you’re solo, find support fast: This doesn’t mean you need a co-founder tomorrow. But find advisors, mentors, or collaborators to avoid isolation.
Consider bringing on a co-founder you trust: Look for someone who complements your strengths and balances your weaknesses.
Play to your strengths, outsource your weaknesses: If you can’t code, don’t spend 3 months learning from scratch. Hire or partner early.
Use your solo status as a story: Investors know it’s hard to go solo. If you’re doing well, highlight that—it shows resilience.
Build a system to avoid burnout: Prioritize sleep, exercise, and breaks. You can’t build something great if you crash halfway there.

16. Only 1–3% of startups raising pre-seed capital get accepted into accelerators

Startup accelerators are harder to get into than you think

If you’ve ever thought about applying to an accelerator like Y Combinator, Techstars, or Seedcamp, here’s the reality check: only 1–3% of applicants get in. That’s tougher than most Ivy League schools.

Accelerators offer mentorship, funding, and networks—but they’re incredibly selective. They’re not just looking for good ideas. They want startups that already show promise: traction, a solid team, and clarity on the problem being solved.

Many founders apply too early, without validation, or with vague ideas.

Why most startups get rejected

Idea is too early or not tested
Team lacks complementary skills
No signs of traction or progress
Weak storytelling in application
Unclear vision or market size

Accelerators want to invest in startups that are ready to move fast. If they don’t see that potential, you won’t get in.

Actionable advice

Build momentum before applying: Run experiments, get users, validate your idea. Show real progress, even if it’s small.
Refine your pitch: Your application should explain what you’re doing in one clear, punchy sentence. If you can’t, you’re not ready.
Have a clear team story: Why are you the team to solve this problem? Highlight background, chemistry, and hustle.
Talk to alumni: Reach out to startups who’ve been through the program. Learn what made them stand out and what to avoid.
Apply with focus: Don’t treat the application casually. Take time to polish it. Be real, be sharp, and be memorable.

17. Startups that fail to find product-market fit in the pre-seed phase have a 90%+ failure rate

Product-market fit isn’t optional—it’s survival

This one’s huge: over 90% of pre-seed startups that don’t find product-market fit will fail. No matter how smart the team is or how polished the product looks, if users don’t love it, it’s not going to last.

Product-market fit means building something people truly want. They use it. They tell others about it. And they’d be upset if it disappeared.

A lot of startups never reach this point. They build features no one asked for, or solve problems no one feels deeply. And that’s what kills them.

The signs of poor product-market fit

Low user engagement
High churn or bounce rates
Users say “cool,” but never return
Struggling to get even free users
Confused messaging and value proposition

If these sound familiar, it’s time to go back to the basics.

Actionable advice

Talk to 100 real users: Go deep. Understand their pain points. Don’t pitch—listen.
Use the “Would you be disappointed” test: Ask users if they’d be upset if your product disappeared. Less than 40% saying yes? You don’t have fit yet.
Track usage, not installs: Installs mean nothing without engagement. Focus on daily/weekly active use.
Simplify your core offering: Strip away extras. Focus on solving one painful, frequent, expensive problem.
Be willing to pivot early: If you’re not getting signs of product-market fit after 3–6 months of testing, change direction. Don’t wait too long.

18. Founders who have failed before are 20% more likely to fail again at the pre-seed stage

Experience doesn’t always equal success

This stat might surprise you: founders who’ve failed before are 20% more likely to fail again at the pre-seed stage. Why? Because failure doesn’t always lead to learning. Some founders carry bad habits or biases from one startup to the next.

Not all experience is created equal. It only helps if you take time to reflect, review what went wrong, and adapt. Many repeat founders rush into a new idea without fixing what broke last time.

Why second-time failure happens

Overconfidence in execution
Skipping customer discovery
Assuming the same tactics will work again
Ignoring feedback
Rebuilding too fast without healing burnout

Founders need to treat each startup like a new challenge—not a copy-paste of the last one.

Actionable advice

Do a post-mortem on your last venture: Write down what failed, why it failed, and what you would do differently.
Bring in a co-founder with a fresh perspective: Don’t go solo again if that didn’t work before. Get complementary skills on your team.
Reset your assumptions: Just because something worked once doesn’t mean it will again. Re-validate everything.
Start slower, with more discipline: Don’t rush into raising money or building fast. Focus on clarity and alignment first.
Talk openly about your past with investors: If you failed before, own it. Show how you’ve grown. Transparency builds trust.

19. 75% of VC-backed startups never return investors’ capital

VC money doesn’t always lead to returns

This one’s big: three out of four startups that raise venture capital never return even the original investment. That means most VCs lose money on the majority of their bets. And if they’re losing money, it likely means the startup either failed or never really took off.

The idea that raising VC money is a win in itself is dangerous. It’s a tool—but not a guarantee. If you take venture money, you’re signing up for pressure, performance, and aggressive growth targets. You need to think beyond just raising—and focus on how to use that capital wisely.

Why VC-backed startups still fail

Chasing growth over sustainability
Poor capital allocation
Misaligned incentives with investors
Lack of a clear path to revenue
Burning cash too quickly

If you raise money and don’t deliver results, the funding doesn’t help. It just speeds up the journey to failure.

Actionable advice

Treat investor money like borrowed time: It’s not a prize—it’s a tool. Use it to build something valuable, not just to look “funded.”
Know your burn multiple: This shows how efficiently you’re turning cash into growth. Keep it under control. VCs watch it closely.
Get investor-aligned early: Make sure your goals match your investors’. If you want a 10-year company and they want a 3x in 2 years, it’s a mismatch.
Build a plan for profitability: Even if you’re not aiming to be profitable yet, have a clear path to get there.
Avoid the “raise-and-spend” trap: Don’t treat every new round as an excuse to scale. Validate before you accelerate.

20. The median time to failure for pre-seed startups is around 20 months

The clock is ticking from day one

For most pre-seed startups, failure happens around the 20-month mark. That’s the median—meaning a lot shut down even earlier. This is the window where ideas either grow roots or wither away.

Founders often overestimate how much time they have. They think funding buys them breathing room. But the reality is: you’re on a timer. And every month needs to move the needle in some way.

Why 20 months is the danger zone

Cash is running out
Traction is unclear
Team morale drops
Investor pressure builds
The vision feels shaky

This is the phase where doubt creeps in. If there’s no visible progress, it gets harder to justify continuing.

Actionable advice

Build a 24-month roadmap from day one: Plan what you want to achieve in months 3, 6, 12, 18. Track it publicly with your team.
Check traction every quarter: Are you moving forward? Are users growing? If not, fix it fast. Don’t coast.
Don’t avoid tough decisions: If something’s not working—pivot. Don’t wait for the money to run out.
Re-validate your assumptions often: The market changes. What worked 6 months ago might be stale now.
Be ready to walk away: Sometimes the smartest move is to shut down and regroup for something new. Don’t let ego keep you stuck.

21. Startups in deep tech or biotech are 2–3x more likely to reach Series A than consumer tech

Not all verticals are created equal

If you’re building in deep tech or biotech, here’s some good news: your chances of reaching Series A are 2 to 3 times higher than in consumer tech. Why? Because investors in these spaces are often more patient, and the markets are more defensible once you get traction.

Consumer tech is flashy but brutally competitive. Deep tech and biotech take longer to build, but they’re often backed by more specialized, long-term-focused investors.

Why deep tech/biotech startups get further

High technical barriers to entry
IP and patents provide defensibility
Fewer competitors
Stronger research backing
Investors understand longer timelines

That said, these startups also require more upfront knowledge, regulation awareness, and scientific or technical credibility.

Actionable advice

If you’re in deep tech or biotech, lead with your science: Investors in these spaces care about the tech itself, not just traction.
Build relationships with specialist funds early: Generalist VCs may not “get” your space. Go where your niche is understood.
Protect your IP: File patents early. Defensibility is a big part of what makes your startup investable here.
Plan for longer timelines: Build a funding roadmap that allows for extended R&D or testing phases.
Balance vision with clear milestones: Investors will back bold ideas, but they still want measurable progress along the way.

22. Less than 2% of startups backed at pre-seed reach unicorn status

Becoming a unicorn is rare—very rare

The dream of many founders is to build a unicorn: a startup valued at $1 billion or more. But the truth is sobering—less than 2% of startups that raise pre-seed funding ever get there. That’s not just hard—it’s almost mythical.

This stat isn’t meant to discourage—it’s meant to shift your focus. If your only goal is to become a unicorn, you’ll likely take unnecessary risks or ignore more realistic opportunities for building a solid business.

Why so few reach unicorn status

Massive market size is required
Execution needs to be flawless
Timing must be perfect
Competition is fierce
Luck plays a bigger role than people admit

Even great startups can cap out before hitting the $1B mark—and still be wildly successful.

Actionable advice

Build for impact, not just valuation: Focus on solving real problems, not hitting an imaginary number.
Avoid the unicorn trap: Don’t chase vanity metrics or raise at inflated valuations too early—it can backfire later.
Stay lean and obsessed with users: The best unicorns started by serving a tiny group of users incredibly well.
Build defensibility into your model: Network effects, proprietary tech, or brand stickiness matter more than hype.
Understand your path to $100M+ revenue: Unicorns often need massive revenue. If your market can’t support that, pivot or redefine your goals.

23. Series A companies that fail often do so within 2.5 years of funding

The post-Series A clock is ticking

Once a company raises Series A, the countdown begins. If it’s going to fail, it usually does so within 2.5 years. That’s a small window to prove scalability, fix gaps, and raise again.

This stage is where pressure mounts. Investors expect growth—fast. Teams get bigger. Costs go up. The vision gets tested in the real world. And if results aren’t there quickly, support dries up.

Why Series A startups stumble within this timeframe

Failing to scale ops with growth
Founders pulled into management too early
Overhiring or mis-hiring
Poor cash management
Inability to hit key metrics

You’re no longer in the “scrappy startup” zone. Expectations shift, and that shift hits hard.

Actionable advice

Plan your runway to last 24–30 months post-Series A: Budget accordingly and avoid surprise expenses.
Set clear metrics-driven goals: Know exactly what success looks like in 3, 6, and 12 months.
Don’t neglect culture during growth: Growth breaks things—including team morale, if you’re not careful.
Layer in systems slowly but deliberately: Keep some startup agility while building structure to handle more people and customers.
Prep for Series B early: Start refining your story, metrics, and investor list 9–12 months after raising your A.

24. Startups with more than two co-founders at pre-seed have a 25% lower failure rate

The power of the right founding team

Having co-founders isn’t just about splitting work—it can shape the whole trajectory of your startup. In fact, startups with more than two co-founders at the pre-seed stage have a 25% lower failure rate.

Why? Because early-stage survival is about speed, adaptability, and energy. More co-founders usually means more hands, faster problem-solving, and built-in accountability.

What makes multi-founder teams thrive

Complementary skill sets
Shared emotional load
Diverse thinking and decision-making
Better ability to divide responsibilities
More investor confidence

That said, more people means more coordination. It only works if the team has alignment, chemistry, and clarity.

Actionable advice

Choose co-founders like you’d choose a life partner: Shared values, mutual respect, and trust matter more than credentials.
Clarify roles from day one: Avoid stepping on each other’s toes. Define who owns what—product, growth, tech, etc.
Write a founder agreement early: Even if you’re friends. Handle equity splits, responsibilities, and exit scenarios clearly.
Build communication habits: Daily standups, weekly syncs, regular check-ins keep everyone aligned.
Support each other through the lows: Founding a company is emotionally taxing. Great co-founders carry each other through it.

25. 50% of pre-seed startups fail before reaching $100K in annual revenue

Hitting $100K in revenue is a major hurdle

This is a crucial benchmark: half of all pre-seed startups fail before they ever reach $100K in annual revenue. That number might sound small in the grand scheme of startup goals, but it’s a key threshold. Why? Because it’s the first real sign that your product works—and people are willing to pay for it consistently.

Getting your first dollar from a user is great. But crossing $100K shows early traction, demand, and some level of repeatability. Missing that milestone often means you’re not solving a painful enough problem—or not doing it clearly enough.

What keeps startups from getting there

Weak value proposition
Low retention or high churn
No clear sales process
Not charging enough or pricing incorrectly
Not focusing on monetization early enough

Trying to grow before figuring out how to earn money is a major risk. You don’t need a perfect product—you just need proof that people will pay to use it.

Actionable advice

Set $100K as your first big revenue goal: Don’t focus on millions until you’ve proven the basics work.
Charge from day one: Free users give you feedback, but paying users prove your value. Even $10/month matters.
Find one use case and own it: Nail a single problem for a small audience. You can expand later.
Create a simple pricing model: Don’t confuse users with options. Make your value easy to understand and easy to pay for.
Talk to your paying users every month: Find out what’s keeping them around and what would make them upgrade or churn.

26. 40% of Series A startups fail due to inability to scale operations effectively

Growth exposes your weakest links

At Series A, the focus shifts from product to scale. But here’s the risk: 40% of startups that raise Series A fail because they can’t scale operations effectively. That includes everything from hiring and onboarding to customer support and internal communication.

A startup that works at 5 people might break at 25. And if systems don’t scale with the business, everything suffers—customers leave, team morale drops, and burn rate explodes.

What scaling operations really means

Hiring without chaos
Consistent onboarding
Smooth internal handoffs
Process documentation
Tech stack that grows with the team

Scaling isn’t just about doing more—it’s about doing more without breaking.

Actionable advice

Map your core processes before scaling: Document how things get done—sales, onboarding, support. Look for bottlenecks.
Invest in operations roles early: A good ops hire at the right time can save you months of future pain.
Don’t over-hire before systems are ready: More people amplify chaos if your processes are broken.
Implement tools that scale with you: Choose CRMs, help desks, and collaboration platforms that won’t require constant switching.
Review your org chart every quarter: As the company grows, your structure needs to evolve. Stay ahead of the mess.

27. 65% of startups that fail post-Series A cite team issues or founder conflict

Team tension can tear startups apart

One of the most under-discussed startup killers is internal conflict. Among startups that fail after raising Series A, 65% report major team issues or founder disputes as a contributing factor. That’s huge.

At the start, it’s easy to stay aligned when you’re in the trenches together. But once there’s money, growth, and pressure, cracks begin to show. Miscommunication, misaligned goals, ego clashes, or just burnout can quickly spiral out of control.

Why teams fall apart after Series A

Role confusion
Unequal workload or perceived contribution
Communication breakdowns
Unspoken resentment or disagreements
Lack of trust or respect

The startup grind is stressful. And pressure doesn’t just reveal character—it magnifies it.

Actionable advice

Define roles clearly post-funding: Everyone needs to know who owns what. Write it down, revisit it regularly.
Have regular, honest founder check-ins: Don’t just talk about business. Talk about how you’re feeling, what’s frustrating, and how you can support each other.
Use advisors or coaches: A neutral third party can help resolve conflict early before it becomes destructive.
Put ego aside: The mission comes first. If someone else is better for a role, let them lead.
Be willing to part ways professionally: If conflict becomes constant, it may be time for one founder to move on. Handle it gracefully.

28. Companies with product-market fit pre-Series A have a 3x greater chance of raising Series B

Product-market fit changes everything

If you find product-market fit before raising Series A, you’re in a much stronger position. In fact, companies that hit this milestone early are 3x more likely to raise a Series B. That’s a huge advantage.

Product-market fit means your users love your product, use it often, and would be upset if it disappeared. When you’ve nailed this, everything else becomes easier: growth, retention, referrals, and ultimately, convincing investors that your model is working.

What product-market fit looks like at this stage

Users come back without being chased
Word-of-mouth growth begins
Low churn and high retention
Strong NPS or customer satisfaction
Revenue starts to grow steadily

Without product-market fit, you’re building on shaky ground. You can fake traction for a while, but eventually, investors—and users—will see through it.

Actionable advice

Run deep user interviews regularly: Go beyond surveys. Understand motivations, pain points, and the “why” behind usage.
Measure retention, not just acquisition: Growth without stickiness is meaningless. Study your cohorts weekly.
Fix onboarding ruthlessly: Make it easier for new users to get value immediately. First impressions are everything.
Listen to usage patterns, not just feedback: People say all kinds of things, but behavior tells you what matters most.
Double down on what works: Once you spot a sticky feature or behavior loop—optimize it. That’s your product-market fit foundation.

29. Only 0.5–1% of startups that raise a pre-seed round go on to IPO

Going public is the rarest outcome

Here’s the real picture: just 0.5–1% of pre-seed funded startups eventually reach IPO. That’s the endgame for only a tiny slice of companies. Most exit through acquisition—or not at all.

An IPO requires years of growth, intense preparation, and serious financial discipline. It also depends on market conditions, which are completely out of your control.

So while it’s a worthy goal, it shouldn’t be the only one.

Why IPOs are so rare

Most startups can’t sustain long-term hypergrowth
Market appetite shifts constantly
The regulatory bar is extremely high
Acquisition often offers a better or quicker return
Founders lose interest or burn out before reaching that stage

It’s not failure if you don’t go public. It’s failure if you never built something sustainable in the first place.

Actionable advice

Keep IPO optional—not essential: Build a business that can survive and thrive on its own. Focus on users, not headlines.
Get your financials right early: You can’t fake your way through an IPO audit. Build the muscle now—clean books, smart projections.
Track long-term growth metrics: Even before Series A, monitor LTV, gross margin, and customer acquisition costs. These tell the story investors care about later.
Learn from companies that made it: Study their timelines, pivots, and patterns. Most were patient, disciplined, and didn’t chase the spotlight too early.
Stay lean, even when you raise big: IPO-track companies don’t burn cash recklessly. They scale wisely and watch every dollar.

30. Startups with repeat founders are 30% more likely to reach Series A

Experience gives you an edge

Here’s an encouraging stat: startups led by repeat founders are 30% more likely to raise a Series A. That experience—especially if they’ve built something before, even if it failed—goes a long way.

Why? Because seasoned founders have been through the chaos. They know what not to do. They understand pacing, how to avoid rookie mistakes, and how to build investor trust.

Experience doesn’t guarantee success, but it significantly increases your chances of getting through the early stages.

Why repeat founders perform better

Better time management
Clearer understanding of product-market fit
Stronger networks
More realistic expectations
Faster decision-making under pressure

Investors love repeat founders because they come with built-in credibility and pattern recognition.

Actionable advice

If you’re a first-time founder, get a repeat founder on your cap table: As a mentor, advisor, or even part-time exec, they can help you avoid major pitfalls.
Act like a repeat founder: Study case studies. Talk to experienced operators. Learn their mindset and habits.
Document your learnings: Whether you succeed or fail, write down what worked and what didn’t. That’s how you become a better founder next time.
Network intentionally: Build real relationships with experienced founders, not just Twitter follows. Conversations matter more than content.
Stay humble, stay curious: The best repeat founders treat every new startup like their first—and never assume they know it all.

Conclusion

The startup journey is full of risk. From pre-seed to Series A, failure can strike at any stage. But knowing the numbers is your first defense. Each stat tells a story—and hidden in each one is a lesson.

This guide wasn’t just about listing failure rates. It was about breaking down why they happen and how to avoid them. Whether you’re at idea stage, pre-seed, seed, or gearing up for your A round, the takeaway is the same: