Why Startups Fail
We analysed hundreds of studies from Harvard Business Review, CB Insights, McKinsey, and leading startup experts. Here's what we found.
Built on research from
We analysed hundreds of studies from Harvard Business Review, CB Insights, McKinsey, and leading startup experts. Here's what we found.
Built on research from
of startups fail globally. 10% in year one, 70% in years 2-5.
Startup Genome, 2025
never show a positive return on investment.
Harvard Business Review, 2021
businesses trading in Australia. 437,000 start each year. 370,000 close.
ABS, 2025of new businesses fail within 4 years. For sole traders, it's 57%.
ABS Business Exits, 2025of survivors fail to grow. Just 3% become high-growth firms.
University of Melbourne, 2024companies entered administration in 2023-24, up 36% year-on-year.
ASIC, 2024Building something nobody wants.
38% fail to raise funding due to weak foundations.
73% of conflicts stem from unclear ownership.
Inability to differentiate or keep pace.
Unsustainable unit economics.
Quality or usability problems that users won't tolerate.
Revenue model doesn't work at scale.
Can't reach or convert target customers.
Not listening to feedback or adapting.
Growing before the foundation is solid.
Focus on pitch decks, demand equity. Not accessible for founders with jobs and families.
Generic support, fixed-length programmes. Don't fit real founder lives.
$150-450/hour puts expert advice out of reach for early-stage founders.
Fragmented advice. No holistic roadmap for your specific situation.
Most startup failures are preventable. The wisdom is there. It's just scattered. Sova consolidates it into a holistic system that assesses your business across all nine elements.
Get your free diagnostic and see where you stand.