Startup failures on the rise

 

Crunchbase data shows that 72 startups have shut down so far this year.  The startup failure rate is increasing, with IVP's general partner Tom Loverro predicting many more on the horizon. Recent startups that failed include biotech startup Goldfinch Bio, wine startup Underground Cellar, fintech firm Plastiq, and pizza maker Zune.  Startups running low on cash reserves will have to resort to cram-down rounds or acquisitions at heavily discounted valuations to avoid failures.  The lack of VC funding in 2023 is the prime reason behind many failures, as several startups still have high cash burn rates causing them to exhaust their capital reserves quickly.  Plastiq and Zune had raised $140M and $500M from VCs before they shut down, respectively.  Loverro is advising portfolio startups to "surgically pare down expenses" to avoid failure.