The key insight this week
543 startups using Carta cap table have shut down through the first 9 months of 2023.
This is the hidden data point that we didn't include in our recent compensation report, but it certainly hangs over the general startup ecosystem in myriad ways.
As you can see in the chart, that's the most we've ever seen in a single year and we still have 3 months left. Not great to be hitting new highs every quarter. Sure, more companies are on Carta than ever before - but shutdowns stayed relatively flat in 2020 and 2021 while the underlying dataset grew substantially.
It's not a perfect dataset - we are only looking at companies who leave Carta for the explicit reason "bankruptcy or dissolution". There are likely some companies leaving for other reasons that are also ending their run.
But even if this is an undercount, it's not a heartening picture.
About half of the companies in question had yet to raise any priced equity from venture capitalists, while the other half had completed at least a priced Seed round.
Even startups that are quite far down the alphabet stage journey are encountering trouble. 34 startups that had raised a Series B or later shut down this year, up from 25 in 2022.
I don't have any pithy transitions or strong comments on this one - it just sucks.
Hug a founder, take care of each other out there.
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Peter Walker
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