The startup āfail fastā narrative is outdated.
Most people assume early-stage teams shut down because they can't find product market fit. Our data shows a different pattern this year.
Early-stage shutdowns are down year over year:
⢠Pre-seed: minus 20 percent
⢠Seed: minus 22 percent
The real increase is at Series A, where shutdowns jumped 133 percent.
Series A companies closing in 2025 are not early experiments. They are teams that:
⢠Raised an average of 18.5 million dollars
⢠Operated for about seven years
⢠Built real products in fintech, proptech, and B2B SaaS
⢠Secured institutional backing and survived multiple rounds
The shift we are seeing is not about ideas falling short. It is about later stage companies struggling to scale profitably in todayās market.
After supporting more than one thousand shutdowns at SimpleClosure, we are seeing founders navigate a correction that is hitting companies with real traction, real teams, and real products. These are credible businesses that pushed through early challenges but could not raise a next round in an efficiency driven environment.
This is only one part of our 2025 State of Startup Shutdowns report. The full data story breaks down how stage, age, capital raised, geography, and sector mix have shifted. Link to the full report is in the comments below.