These Are the Major Reasons a Start-up Fails Believe Investors

Source | Entrepreneur : BY 

While there are many start-ups cropping up in various industries and segments across India, not all of the ideas meet with success. Some of them fail to make their mark in the ecosystem, some which are heavily funded while others which faded out as they reached out the investor table.

There are many factors that lead to a start-up’s death and investors while evaluating one know exactly the reasons why a start-up can’t succeed. Entrepreneur India spoke to investors who listed out the factors that often lead to a start-up’s failure.

Not Assessing the Environment

Before entering an industry, it is critical that the founder evaluates the segment and understands it completely. Srikanth Sundararajan, General Partner, VentureEastbelieves that one of the biggest reasons of failure is that the leadership of a start-up is not aware of the environment, macro and micro competition. “The executive needs to be on constant vigil and ensure pragmatic measures are being undertaken,” he said.

He added that the focus of a founder should always be on the building value in the business ethically, without rushing into making decisions. The trick lies in not blinding competition or cutting corners.

Agreeing with Sundararajan, Aditya Awasthee, Angel Investor and founder of NeXus Circle believes that the lack of a product-market fix is another reason why start-ups fail to prosper. “There will ultimately be no paying customers or a fragmented demand for them,” he said.

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