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Possibly—but the evidence available in January 2025 supported a cautious forecast, not a settled conclusion. Two private datasets showed more startup shutdowns or wind-downs in 2024 than in 2023, while a narrower count of publicly reported tech-company closures fell. Those figures suggest continued pressure, but they do not count every startup or establish a market-wide failure rate.
What the 2024 shutdown counts show
Two startup-focused datasets reported increases in 2024. Their counts cover different populations and events, so they should be read separately rather than combined into a single estimate.
| Source and measure | 2023 | 2024 | What it covers |
|---|---|---|---|
| Carta shutdowns | 769 | 966; up 25.6% | U.S.-based Carta customers that left the platform because of bankruptcy or dissolution, as reported by TechCrunch on January 26, 2025. TechCrunch |
| AngelList wind-downs | 233 | 364; up 56.2% | Startup wind-downs tracked by AngelList and reported by TechCrunch; this is not the same population or event definition as Carta’s. TechCrunch |
| Layoffs.fyi shutdowns | 109 | 85 | Publicly reported tech-company shutdowns. This narrower series can miss closures that are not publicly reported. TechCrunch |
The first two series point to more recorded shutdown activity; the third moved in the opposite direction. None is an official census of all startup closures. Counts also depend on whether a source records bankruptcy, dissolution, a wind-down, or a public announcement, as well as which companies it can observe.
Why the counts do not establish a startup failure rate
A failure rate needs a defined group of companies at risk over a defined period—a denominator that matches the closures being counted. These datasets provide counts, not a consistent denominator for all startups. Carta’s figure, for example, is limited to U.S.-based companies that were Carta customers and were categorized as leaving through bankruptcy or dissolution. It is not a count of every U.S. startup, and it says nothing directly about startups outside that customer base.
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“Failure” also covers different outcomes. A company may dissolve, enter bankruptcy, wind down voluntarily, or close quietly. Some may return remaining funds to investors; others may have no capital left. Those outcomes are not interchangeable, and a company’s departure from a platform does not by itself describe every detail of its financial condition.
Broader business statistics offer context, not a direct comparison. The U.S. Bureau of Labor Statistics reported that 57.3% of establishments born in 2018 survived five years; this tracks establishment survival, not venture-backed startup shutdowns. BLS, “Business Employment Dynamics Twentieth Anniversary!” The Census Bureau’s Business Formation Statistics track applications and formations, rather than startup shutdown counts. U.S. Census Bureau, Business Formation Statistics Kauffman’s 2025 early-stage entrepreneurship report, published in 2026, gives a 77.9% one-year survival rate for new U.S. business establishments, another broad establishment measure rather than a venture-backed startup failure rate. Kauffman Indicators of Entrepreneurship
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What the sector and funding-stage figures mean
Within Carta’s 2024 shutdown data, enterprise software as a service accounted for 32% of closures, followed by consumer companies at 11%, health technology at 9%, fintech at 8%, and biotech at 7%. These percentages describe the composition of shutdowns in that dataset. They are not sector-specific closure rates: without knowing how many companies in each sector were operating or in the measured population, a larger share of shutdowns does not show that sector was more likely to fail. TechCrunch
SimpleClosure, a company that helps startups wind down, reported that 74% of the shutdowns it had seen since 2023 were pre-seed or seed-stage, with 41% at seed stage. That describes the companies in its experience, not all startup closures. SimpleClosure CEO and co-founder Dori Yona also said that 60% of the failed startups in his experience had no capital left to return to investors. He said that founders who did return funds had an average of $630,000 remaining—about 10% of the capital raised. These are attributed observations from that company’s experience, not representative market-wide estimates. TechCrunch
Why shutdowns may continue
Running out of cash is often the immediate reason a startup closes, but the pressures behind it can differ. Peter Walker, Carta’s head of insights, described cash depletion as the proximate cause and pointed to factors such as weak product-market fit, difficulty reaching cash-flow positivity, and high valuations that can make new fundraising harder. These are industry explanations, not proof of why any particular company shut down. TechCrunch
Walker also linked the timing of closures to the unusually large funding volumes and rounds of 2020 and 2021: companies funded during that period can reach a cash crunch later, so shutdowns may lag behind the funding peak. He cautioned that Carta may not see every closure; companies that leave without reporting a reason are difficult to classify. Yona separately argued that rapid access to capital encouraged some startups to prioritize high spending and growth over a path to sustainability. That explanation may fit some companies, but the available counts do not establish it as a cause across the market.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What the January 2025 forecast actually said
Based on the 2024 figures, Walker expected shutdowns to keep rising into the first half of 2025, then decline gradually later in the year. He also said the number of additional closures was difficult to estimate. That was a forecast made in January 2025—not confirmation that the full year ultimately proved to be another record or “brutal” year.
AngelList CEO Avlok Kohli said startups founded at high valuations were not all destined to fail, underscoring that funding conditions and prior valuations do not determine every company’s outcome. A higher shutdown count in a platform dataset can be a meaningful warning signal without predicting what will happen to any individual startup or proving a sector-wide outcome.
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