🪦 The Startup Graveyard: Why VC-Backed Companies Keep Dying

Let’s play a game.

I’ll name a few companies, and you guess what they have in common:

🚨 Juicero – A $120M startup that sold a $400 juicer… that wasn’t actually needed.
🚨 Quibi – A $1.75B video platform that no one wanted.
🚨 Theranos – A $9B company built on… well, pure fiction.

If you guessed “They all raised insane amounts of money and failed spectacularly”, you’re right.

But here’s the scary part: They’re not outliers.

Most venture-backed startups—over 75%—fail.
And they don’t just quietly shut down.
They implode—with millions (or billions) burned, employees laid off, and investors left wondering what the hell happened?

So what actually kills these companies?

It’s not bad luck.
It’s not competition.
It’s avoidable mistakes—mistakes that you can learn from.

Today, we’re digging deep into why VC-backed startups fail—and what you can do to make sure you never end up in the startup graveyard.

🔥 The 3 Biggest Reasons Startups Fail After Raising Millions

1️⃣ Too Much Money, Too Fast

Venture capital is like rocket fuel.
If you know how to handle it, it can take you to the moon.
But if you don’t? It blows up in your face.

The moment a startup raises millions, something shifts:

• Founders stop thinking scrappy and start thinking big.

• Instead of validating their model, they scale prematurely.

• They throw money at problems that should’ve been solved with first-principles thinking.

🚨 Example: Juicero ($120M raised, completely useless product)

Juicero built a $400 juicing machine that wasn’t needed—because you could just squeeze the juice packs with your hands.

But because they had so much money, they convinced themselves that a market existed.

They burned millions on:
✅ A sleek, over-engineered machine that no one needed.
✅ A subscription model that made no sense.
✅ Hype marketing instead of actually solving a problem.

Then Bloomberg published a video of someone hand-squeezing the juice packs, and Juicero became a joke overnight.

Lesson: More money doesn’t mean better decisions. It usually makes bad decisions worse, faster.

2️⃣ Hiring Too Fast, Too Soon

When startups raise capital, they think:
“Now we can finally hire a world-class team.”

But hiring too soon is like putting an engine in a car before you build the brakes.

• You hire people before you even know what works.

• You build layers of management too early.

• You lose the speed and adaptability that made you special.

🚨 Example: Quibi ($1.75B raised, dead in 6 months)

Quibi was supposed to be “Netflix for mobile”—short-form, high-budget video content for people on the go.

Sounds smart, right?
Well…

✅ They hired executives from Hollywood instead of product-focused startup leaders.
✅ They overbuilt—investing in high-budget content before proving demand.
✅ They ignored how people actually consumed content (TikTok was free, Quibi cost $8/month).

Six months after launch, they shut down.
They didn’t fail because they lacked money.
They failed because they built an empire before proving anyone wanted it.

Lesson: You don’t need a “team” if you don’t have a product that people love yet.

3️⃣ No Real Product-Market Fit (But They Scaled Anyway)

Here’s the #1 mistake that kills VC-backed startups:

🚨 They confuse raising money with finding product-market fit.

Just because investors believe in your vision doesn’t mean customers do.

Founders raise millions, assume that means they’ve “made it,” and scale before actually proving demand.

🚨 Example: Theranos ($9B valuation, built on lies)

Theranos was supposed to revolutionize blood testing.
The pitch? A tiny device that could test for hundreds of diseases from a single drop of blood.

Except…

• It didn’t work.

• They faked demo results.

• They scaled a product that was scientifically impossible.

And because they had so much capital, no one questioned them—until it all collapsed.

Lesson: No amount of funding can save you if your product isn’t real or doesn’t solve a real problem.

🔥 What Successful Pivots Have in Common

So if bad startups scale before finding product-market fit,
what do good startups do instead?

📌 They iterate relentlessly before scaling.
📌 They let demand pull them forward.
📌 They don’t hire or spend big until they have a clear, working model.

🚀 Example: Slack (Started as a Gaming Company, Became a $27B Business)

Slack wasn’t meant to be a communication tool.
It started as a gaming company, but when their game failed, they noticed…

Their internal chat system was way more useful than the game.

So instead of sticking to their original idea, they pivoted.

Now, it’s a $27B+ company.

Lesson: Startups that survive don’t just chase funding.
They adapt when reality doesn’t match the vision.

🚀 How to Avoid Ending Up in the Startup Graveyard

If you ever build a startup, here’s what you need to remember:

✅ Money doesn’t solve problems—it amplifies them.
✅ Hiring too early kills agility.
✅ If customers don’t love it, don’t scale it.
✅ Raising millions is not the goal.

The best founders don’t just think about how to raise money.
They think about how to make sure they don’t burn it on the way to the graveyard.

See you in your inbox,
— The WanderYak Team 🐂💨