At which stage do more startups fail?

According to multiple studies, including CB Insights and Startup Genome, about 90% of startups fail, but here’s the interesting part:

• Roughly 42% fail due to lack of market need (validation issue).
• About 29% fail because they run out of cash (execution issue).
• Nearly 23% fail because they don’t have the right team (scaling issue).

These percentages map directly to different stages of a startup’s lifecycle.

So rather than asking “why startups fail,” a smarter question is:

“At which stage do they fall apart — and what was the mindset mistake that caused it?”

Let’s analyze this through the lens of the four stages I shared in my LinkedIn post.

1. Pre-Seed Stage: The Foundation

This is where everything feels possible.
You’re shaping ideas, validating problems, and testing assumptions. The excitement is contagious.

But this is also where most invisible deaths happen, the ones nobody talks about.

Why Startups Fail Here

• No real problem validation. Founders build what they think people need.
• Speed over direction. They rush to code or design before confirming demand.
• No focus. They chase multiple ideas instead of one validated pain point.

Mindset Shift Needed

At this stage, Direction > Speed.
Spend more time asking “Why this problem?” than “How fast can I build it?”

Around 42% of startups fail here (CB Insights, 2023). This stage demands data-driven validation, not optimism-driven execution.

2. Seed Stage: Turning Ideas Into Action

Now you’re building something real. You’ve got early believers, a small team, maybe even a prototype. The dream is materializing, but pressure is rising.

Why Startups Fail Here

• Chasing funding instead of validation. They burn time pitching investors instead of talking to users.
• Weak product-market fit. The product exists, but it doesn’t fit a real need yet.
• Emotional burnout. Founders expect momentum to come faster than it does.

Mindset Shift Needed

Don’t chase funding, chase validation.
At this stage, the smartest founders act like scientists: they experiment, analyze, and iterate.

Roughly 1 in 4 startups die here because they can’t transition from “idea mode” to “execution discipline.”

3. Early Stage: Building Momentum

This is the hardest and most critical stage.
You’ve proven something works, now you need to make it stable, repeatable, and scalable.

The problem? Most founders underestimate how mentally draining this phase is.

Why Startups Fail Here

• Customer learning stops. Founders assume they “know their users” and stop listening.
• System chaos. Operations, sales, and tech grow faster than management structure.
• No adaptability. The product works, but the founder’s mindset hasn’t evolved.

Mindset Shift Needed

Every sale offers feedback. Every user conversation is a free masterclass.

Many promising startups fade here, not from lack of opportunity, but from founder fatigue and process misalignment.

This is where execution discipline meets emotional resilience.

4. Growth Stage: Scale Smartly

You’ve got traction, users, maybe even revenue. It’s tempting to chase bigger numbers , more hires, more features, more markets.

But the truth is, growth doesn’t kill startups — unplanned growth does.

Why Startups Fail Here

• Scaling chaos. Teams expand faster than culture and systems.
• Complexity outpaces clarity. Too many moving parts, not enough focus.
• Leadership stretch. Founders stop growing with the company.

Mindset Shift Needed

It’s not about doing more — it’s about doing better.

Scale only what works. Simplify everything else.

While fewer startups die here, those that do often burn millions and years due to lack of strategic clarity.

The Hidden Truth: Founders Fade Before Startups Fail

Startups rarely fail in a single catastrophic moment. They fade slowly, mindset first, metrics later.

• The founder loses curiosity.
• The team loses alignment.
• The vision gets buried under tasks.

The business becomes a reflection of the founder’s internal state.
And that’s why recognizing your stage, and the mindset it requires — is the ultimate survival skill.

Conclusion: Trust the Stage You’re In

Every big startup once looked small. Every small startup had someone who refused to give up.

So wherever you are, validate deeply, build patiently, scale wisely.

Success isn’t about skipping stages; it’s about mastering them.

And if you’re a founder who’s unsure which stage you’re really in, or what mindset that stage requires, I’d be glad to help you map it out. Sometimes a 15-minute chat can prevent a six-month mistake.

Trust the process. Trust the stage you’re in.