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A hill in San Francisco with "Do not enter" signs
REUTERS/Shannon Stapleton
Startups face an uphill battle.
DEEP CUT

Without intervention, 41% of startups will be out of cash within three months

Walter Frick
Member exclusive by Walter Frick for Why startups fail

Jeffrey Bussgang, a general partner at Flybridge Capital Partners, thinks of the startups in his portfolio on a 2×3 matrix. On the vertical axis, he asks, “Do they have cash to last at least 18 months?” He divides the horizontal access by how the pandemic has affected their business: positive, neutral, and negative.

Most tech startups around the world fall in the bottom left of Bussgang’s matrix—the danger zone—where, he says, they may need to cut costs by something like 60% to survive.

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