Founders, take note: here’s why most startups fail

• The Indian startup ecosystem saw the birth of six new unicorns this week alone.
• But far from the valuations of a billion dollars, there are also thousands of startups who continue to struggle to see the light of day.
• As startups pursue the unicorn tag, here’s what entrepreneurs need to watch out for to make sure their businesses don’t fail.

The Indian startup ecosystem is experiencing a massive boom. After all, we saw the birth of six new unicorns this week alone. But far from the billion dollar valuations and thunderous applause from all, there are also thousands of startups that continue to struggle to survive.

While some struggle to raise funds, others struggle to stay afloat during testing times for the COVID-19 pandemic. Many successful entrepreneurs, who already run big startups worth billions, celebrated the rise of the new unicorns and welcomed them to the club. They also made it a point of honor to greet many other founders, who are struggling to raise funds.

So it’s important for startups to have an eye on the larger goal. “While the importance of startups in building wealth may seem obvious, if these startups don’t survive, it seems counterproductive,” said one KPMG Startup Assessments Report dated March 31, 2020.

According to the report, here are the common reasons why most startups fail.

The crisis continues and the challenges remain

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And the COVID-19 pandemic has only made things worse for startups. The KPMG report added that in 2020, up to 70% of Indian startups had less than three months of track, while 35% of them saw their revenues drop by more than 80%.

As the second wave of COVID-19 has invaded the country and lockdowns have been implemented in several states, startups will need to continue to innovate to stay ahead of the curve.

But as startups strive to grow, they also face many challenges. According to a Innoven Capital report, here are the challenges facing most entrepreneurs today.