Boom time is over: Startups are failing as funding dries up

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Declines in the venture capital market are hitting startups of all sizes, but the ones left particularly vulnerable are the thousands of young companies that raised seed funding during headier times just a year or two ago.

The seed frenzy peaked in the first quarter of 2015 when more than 1,500 startups raised their first rounds of capital, according to research firm PitchBook Data. Many of those companies are now running out of cash, and most won’t be able to get more.

Dying is a fact of life for most startups, but corporate graveyards are filling more quickly this year. The pain is likely to drag on for another 12 to 18 months as early-stage companies fizzle out earlier than usual or limp along without access to more capital, said Gus Tai, a general partner at Trinity Ventures. “The pressure is even more acute,” he said. Read more…

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