You are here Home » Start-ups » What to Do When Your Tech Start-up Is Failing

What to Do When Your Tech Start-up Is Failing


Image Credit:


According to a 2018 report, the tech start-up industry had a failure rate of 63%. Over the years, that number has likely gone up. New businesses find it hard to survive in the market. Tech-based start-ups, especially, seem to lose their way sooner than most other businesses.

There could be many reasons as to why a tech start-up fails. However, the more pressing question is what do you do when you realize that your business is on the verge of collapse? That is something we will be discussing today. 

So without further ado, here is a quick discussion of what you can do when you see your tech start-up failing.

Consider Selling the Business

Your tech start-up is failing, and you are constantly losing money. On top of that, you do not know what to do. The whole situation is also taking a toll on your mental well-being. In such cases, you should consider selling your business.

Selling a business, especially your start-up can be quite troubling. You will want to sell your business to the right buyer for the maximum value. And to do so, you are going to have to work hard. 

The selling process is very tedious. That is why you should consider working with business brokers so that you can land a good deal on the sale. They will help you track down potential buyers and make sure that you are getting the best value for your tech-based start-up. 

The best business brokerage firms can help you save a lot of time and effort. They can also help you devise an exit strategy so that you can invest your time and money elsewhere once the sale of your business gets finalized. And of course, with the resources they have, they can find you a really good buyer and land you a good deal on the sale of your business.

Rethink Your Strategies and Business Model

New businesses often fail because they are unable to cope with the latest market trends. They enter the market with a certain strategy and realize that it was the wrong one, or the right one at the wrong time. Sometimes, it could also be that their entire business model is unfit for the market or type of business they are in. As a result, the start-up continues to lose money and eventually fails.

There are many ways to understand whether or not your business model or strategy is working effectively. Once you determine the answer to this, and it comes out in the negative, you should consider making some urgent changes to the overall model. The sooner you make these changes, the sooner you can turn the fate around of your tech start-up.

While working on a new business model, you should also rethink your marketing strategies. The tech industry is quite saturated at the moment. There is a new tech start-up popping up every once in a while. And all these up-and-coming tech companies are your competition. So you need to strike early and make your mark in the industry. And there is no better way to make your presence felt than by running some amazing marketing campaigns.

Find New Investors

Getting new investors on board is very important, especially if you are losing money or plan to expand the business. Investors will provide you with the necessary financial backing so that you can take some calculated risks. The funding will also allow you to renovate the business infrastructure. That way, you can easily redo the business model and see where it takes your tech start-up. 

Once you have the money, you can invest it in new technology as well as personnel. You can also utilize the funds for marketing campaigns. Whatever you are using funds for, make sure it can get you out of the sticky situation you are in with your start-up. Your problems will only increase if your investments do not work out. In such a situation, not only do you have to deal with a failing business, but you will also have to figure out a way to pay back your investors.

As you can tell by now, there is only a limited number of things you can do when your tech start-up is failing. However, if you do it right, you can recover from your loss. And if not, you will at least be able to sell the business at a decent price. Timing is very vital in this regard. So the moment you notice signs of failure, you should start acting on it.

You may also like