About 20% of Tech Startups Worth More Than $1 Billion Will Fail, Accel Says

An anonymous reader shares a report: There are more than 1,000 technology unicorns, meaning venture-backed companies worth $1 billion or more, but at least one in 5 are likely to fail, said Rich Wong, a partner at venture capital firm Accel Partners. 'I think maybe out of that thousand, 20% fully die. The end,' Wong said on Thursday at the Bloomberg Tech conference in San Francisco.

The estimate reinforces what's become a grim calculus for many companies. Tech start-up valuations soared during the 2021 pandemic boom -- before crashing back to earth, as interest rates rose and venture capital investments fell. Of the companies that don't fail, about half will be stuck -- muddling along without being able to grow bigger or go public, Wong said. Some of those may 'ultimately have reality set in,' and sell themselves for lower prices than once seemed feasible. Others, not quite failing, 'will be a bit zombie-ish and grind on,' he said.

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