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Welcome to where I write about my journey from a stable Big Tech Software Engineering job to the wild and volatile world of Venture Capital.
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As a SWE wading into the world of VC, I’ve been diving deep into startup data to understand what makes companies succeed or fail. Today, let’s talk about something that keeps founders up at night: startup survival rates.
🚨 The Reality Check
We’ve all heard the often-quoted stat that “90% of startups fail.” But what does the data actually show?
💡 Quick Take: According to U.S. Bureau of Labor Statistics data (2025), ~20% of startups fail in their first year, and only ~50% survive past year five. These rates have remained remarkably consistent over the past decade, across sectors.
StartEngine’s $30M Surge — Own a Piece Before June 26
StartEngine is the investing platform providing exposure to pre-IPO companies like OpenAI, Perplexity, and Databricks.
After doubling their revenues YoY in 2024 ($23M to $48M), StartEngine’s now tripled first quarter revenue YoY to a record $30M, based on its unaudited Q1 2025 financials. Now you can join 45K+ shareholders across all offerings before this round closes next month.
Reg A+ via StartEngine Crowdfunding, Inc. No BD/intermediary involved. Investment is speculative, illiquid & high risk. See OC and Risks on page.
🔍 Breaking Down the Risk Factors
I’ve seen that startup survival typically hinges on managing five key types of risk:
Technology Risk – Can we build what we promise?
Market Risk – Will customers actually want what we build?
Scaling Risk – Can we grow fast enough to matter?
Business Model Risk – Can we make money doing this?
Defensibility Risk – Can we keep competitors at bay?
These categories are echoed in frameworks from investors like Dan Hockenmaier (2024). And their impact shifts over time:
Early-stage startups tend to fail due to market risk (i.e., no one wants what they’re building).
Growth-stage companies struggle more with scaling and business model risk.
CB Insights (2021) confirms this: the #2 cause of failure is no market need, cited in 35–42% of startup post-mortems (CB Insights).
🛠️ Survival Strategies
Three tactics consistently show up among startups that beat the odds:
Customer Discovery First
Founders who deeply understand user needs before building are more likely to find product-market fit. “Build it and they will come” is a myth. As Steve Blank said, get out of the building.
📊 35–42% of startups fail due to lack of market need (CB Insights, 2023)
Capital Efficiency
Runway is survival. Startups that control burn rate and stay lean are more likely to survive long enough to iterate.
📉 In 2023, many startups cut burn rates by 50%+ to extend runway amid tighter VC markets (https://www.scalevp.com/insights/year-of-efficiency-in-review-how-companies-reduced-burn-rates-in-2023/
Team Adaptability
75% of founders who pivoted said the pivot positively impacted their company’s future (Wilbur Labs, 2023). Being stubborn with your vision is romantic. Being flexible is what wins.
👨💻 The Engineer’s Perspective
As an engineer, I used to believe great tech wins. But the data paints a different picture.
🔍 Key Insight: Timing and solving the right problem matter more than the best technology.
Bill Gross studied hundreds of startups and found timing was the #1 factor in success — more than idea, team, or funding (TED Talk Summary)
💼 What This Means for Investors
As I transition into VC, these survival insights are changing how I evaluate startups:
Is the biggest risk (market, model, or tech) already de-risked?
Is the team coachable and adaptable?
Are they solving a big problem now, not just in theory?
The best founders I’ve seen are masters at de-risking—methodically reducing uncertainty across these categories. VCs like Andreessen echoed this thinking: success isn’t just about brilliance—it’s about navigating risk with discipline (Startup Archive).
Until next time —
Signing off and signing zero checks,
SWEdonym
PS: Drop me a note with feedback, hot takes, or counterpoints. Always happy to trade notes on what’s working (or not) in your startup world.
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StartEngine’s $30M Surge — Own a Piece Before June 26
StartEngine is the investing platform providing exposure to pre-IPO companies like OpenAI, Perplexity, and Databricks.
After doubling their revenues YoY in 2024 ($23M to $48M), StartEngine’s now tripled first quarter revenue YoY to a record $30M, based on its unaudited Q1 2025 financials. Now you can join 45K+ shareholders across all offerings before this round closes next month.
Reg A+ via StartEngine Crowdfunding, Inc. No BD/intermediary involved. Investment is speculative, illiquid & high risk. See OC and Risks on page.
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