A Study on High-tech Startup Failure : Antecedents, Outcome and Context

A significant number of startups fail during their first years of operations, and most of them crash within five years. A wide range of reasons for startup failures has been identified in the literature. However, most of the reasons for startup failures are too general in that they focus on startups in general. In this regard, not every factor may be responsible for the failures of some startups. Although there are adequate investigations that have provided substantial evidence about different reasons that cause startups failure, this study aimed to review these reasons collectively to determine how they relate to high-tech startup failure. This study used a qualitative research method to collect and analyze data from 15 founders of high-tech startups in the United States (US), Finland, and Canada. The researcher conducted interviews through Skype and analyzed data using thematic analysis to derive relevant themes to the study. Likewise, the researcher conducted a profound, systematic review to identify themes relating closely to startup failures. The results showed that high-tech startups failures relate closely to product and market challenges (product timing difficulties, product design problems, improper or absence of selling strategy/ distribution channels, and small market size), financial problems (initial undercapitalization and debt burden), and management issues ( lack of competent teams and human errors). The study showed that a wide range of factors leads to the failure of high-tech startups. Therefore, founders and personnel working in these high-tech startups should pay attention to the identified areas to minimize the chances of failure