Why More Than 50% of African Startups May Struggle to Survive
At the heart of most startup failures is one simple issue: they run out of money. But why does this happen? The reasons can be complex, yet they often boil down to two main factors.
Firstly, if a startup struggles to succeed, it depends heavily on investor funding. Over time, investors may lose confidence in the business, making it difficult to secure additional funds. If a company fails to achieve product-market fit or scale fast enough, or if unexpected challenges arise, investors may decide to pull out. Once a startup can no longer raise capital, survival becomes impossible.
Secondly, internal conflicts and external pressures can also lead to failure. Disputes among founders, the involvement of the wrong investors, or fierce competition from established corporations can all crush a business. Large companies with significant resources may see a startup as a threat and aggressively outspend it, leaving little room for survival.
Ultimately, while startups fail for many reasons, the inability to sustain funding remains the most common downfall.
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