On the 6th of October, 2023, it was reported that Dash, a startup based in Ghana, had shut down.
That’s a few weeks after it was also reported that Payday, a startup based in Nigeria was in the process of being sold.
Stories of startups failing abound.
This makes it important to ask this simple question “Why do startups fail?”
There are a lot of reasons why startups fail, however here are the key reasons why startups fail:
Bad Corporate Governance: Inadequate corporate governance can lead to a lack of accountability within the organization, making it difficult to question poor decision-making, such as excessive CEO salaries.
Cash Burn: Many startups spend more money than they generate in revenue, often due to factors like excessive hiring, extravagant marketing campaigns, and mismanagement of funds.
Toxic Work Environments: Pressure for success and poor leadership styles can create toxic work environments in startups, leading to employee stress, burnout, and talent drain.
Power Tussles: Conflicts and power struggles among co-founders, often due to unclear roles and unequal contributions, can hinder a startup’s growth and even truncate the startup.
Kindly share some other reasons why startups fail in the comment section.