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January 29, 2023 | Tom Ballard

Cash is still king for a start-up’s success

Lack of financing, running out of cash top reasons for failures in 2022.

Skynova, a company that makes invoicing software for small businesses, surveyed 492 start-up founders in November 2022 and analyzed data from CB Insights for a new study that looks at the most common reasons behind start-up failures. The findings should not come as a surprise, but are a reminder of the always important maxim that “cash is king.”

The top reasons were:

  • Lack of financing or investors, accounting for 47 percent of start-up failures in 2022, nearly double the percentage that failed for the same reason in 2021;
  • Running out of cash which was behind 44 percent of the failures; and
  • The impact of the ongoing COVID-19 pandemic which declined to 33 percent of the failures in 2022, down from the high 59 percent a year earlier.

The findings can be found here.

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