Why Most Startups Struggle in the First 5 Years (and How to Avoid It)

We often hear it: “The science will sell itself.” But in reality, the data tells a different story. According to the U.S. Bureau of Labor Statistics, approximately 45% of new businesses fail within the first five years, and 65% fail within the first ten years. In our experience, many of these failures aren't due to the science itself but because the necessary structures around the science were never built.

So, what actually goes wrong?

1. Sales Start Too Late

Many biotech founders rely on grants, early investors, or personal networks to secure initial wins. This approach can work initially, but often hits a ceiling. Without a structured sales strategy, growth stalls.

Tip: Sales isn't a phase to begin after development; it's a core capability to build alongside your science.

2. No Clear Go-to-Market Path

Knowing your product works isn't enough. You must identify who it's for, why it matters, and how you'll reach them. Many early-stage companies underestimate the complexity and cost of going to market without a plan.

Tip: Define your Ideal Customer Profile, Value Proposition, and Buyer Journey early. These aren't just sales terms, they're essential survival tools.

3. The Team Isn't Ready

Even brilliant scientists can feel unprepared or uncomfortable during commercial discussions. We've seen companies hire experienced salespeople too early, only to watch them leave within six months due to a lack of structure.

Tip: Train and align your internal team first. Commercial readiness isn't just about hiring; it's about building capability.

4. Processes Don't Scale

Many teams manage leads in spreadsheets, skip CRM systems, or allow each person to "do it their own way." This approach may work short-term but quickly leads to chaos.

Tip: Your pipeline is your future revenue. Invest in setting it up before you need it.

5. Cash Flow Cripples Early-Stage Startups

According to Fundera, 82% of business failures are due to cash flow problems. Most startups begin with limited capital, struggle with pricing, or overestimate early sales. In biotech, long development cycles make it even harder to predict revenue timing. Without financial visibility and solid planning, even promising companies can burn through funding too fast.

Tip:  Start financial forecasting early, even before you're ready to sell. Be conservative with sales projections and generous with runway. Regularly revisit your go-to-market strategy as milestones shift.

So, What Can You Do Differently?

Success doesn't come from doing more; it comes from doing the right things at the right time, with the right structure behind you. That's why we work with biotech startups as advisors and partners, helping them grow smart, build structure, and scale what works.

If you're in those critical first five years, we'd love to hear where you are, and help you get to where you're going.