543 Carta startups have shut down so far in 2023.
That's more than the 467 that shut down all of last year. Not great.
This analysis looks at the companies using our cap table platform that shut down in a given quarter due to bankruptcy or dissolution. In that sense, it's a concrete metric of startup failures though it probably is an undercount.
And yes, there are more startups using Carta this year than did so last year. So we'd expect some gradual rise in total shutdowns - but this increase far outpaces that expectation.
𝗔 𝗳𝗲𝘄 𝗹𝗼𝘄𝗹𝗶𝗴𝗵𝘁𝘀:
About half of the startups that closed shop did so without raising any VC rounds. The other half had at least one priced round in their history.
Within the cohort that had raised from VCs, 90% of the shutdown were either Seed or Series A startups.
34 startups that raised a Series B or later have shut down so far this year - that's higher than the 25 in 2022.
87 startups that raised at least $10 million have shut down this year. That's nearly 2x the total from last year.
Any way you slice it, this is the most difficult year for startups in at least a decade.
I believe the fundraising market will improve in the coming quarters, though it may not hit the highs of recent years.
Sadly, I also expect shutdown to continue at an elevated pace for the next 2-3 quarters as well. The dichotomy between new startups receiving backing and current companies floundering without cash will be tough to square.
As usual, hug a founder out there ❤️
#cartadata #startups #founders #fundraising #shutdowns
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