Home Startups Why The Top 1% of Founders Quit Their Startups | by Daniel Kang | Aug, 2023

Why The Top 1% of Founders Quit Their Startups | by Daniel Kang | Aug, 2023

by delta
0 comment

Framework of quitting from a YC Founder, ex-MBB consultant, and Softbank Investor

Source: iStock (tatianazaets)

“If you can just avoid dying, you get rich. That sounds like a joke, but it’s actually a pretty good description of what happens in a typical startup.”

That quote from Paul Graham’s essay How Not to Die stuck with me during my struggles as a 3rd-year founder backed by Y-Combinator.

For an average small business in the US, you beat 25% of competitors by surviving year one on average. By year four, you’ve beaten half.

For funded startups, the numbers look even better.

Source: TechCrunch

You beat out ~90% of your competitors if you’ve survived long enough for a Series-C. Directionally, if your chances of becoming a unicorn were 1% when you started, you 10x that probability by surviving long enough to get a Series-C.

Now, proposing “just don’t die” as a solution to “I’m dying” in an industry where 95% of startups fail sounds silly. But on a deeper look, it holds merit when you examine why most early-stage startups die.

According to surveys by CB Insights, founders list running out of money and competition as the top reasons. When you speak to founders, that’s rarely the case. Paul seems to agree with me on this one:

When startups die, the official cause of death is always either running out of money or a critical founder bailing. Often the two occur simultaneously.

But I think the underlying cause is that they’ve become demoralized.

Personally living the experience in search of PMF and speaking with peers, I’ve observed that the breakdown and demoralization of founders is the leading cause of death for most early-stage, pre-product-market fit companies.

To borrow language from Ben Horowitz in his book Hard Things about Hard Things, every founder goes through “The Struggle”.

You may also like

Leave a Comment


Delta-Compliance.com is a premier news website that provides in-depth coverage of the latest developments in finance, startups, compliance, business, science, and job markets.

Editors' Picks

Latest Posts

This Website is operated by the Company DELTA Data Protection & Compliance, Inc., located in Lewes, DE 19958, Delaware, USA.
All feedback, comments, notices of copyright infringement claims or requests for technical support, and other communications relating to this website should be directed to: info@delta-compliance.com. The imprint also applies to the social media profiles of DELTA Data Protection & Compliance.

Copyright ©️ 2023  Delta Compliance. All Rights Reserved