Startups Are Shutting Down!

Big startups are shutting down. More than 3000 private venture backed startups failed in the last year. Of the startups raising money, 19% were funded at a lower valuation than in prior funding rounds. 38% of VCs disappeared from dealmaking last year and more than a quarter of a million workers at tech companies lost their jobs over the same period. US corporate bankruptcy filings closed out 2023 with the most filings since 2010. The year has been described as a mass extinction event for startups in the press.

The Inevitable Decline of WeWork

WeWork announced this week that it would not make two sets of interest payments totaling about $95 million, a move meant to jump-start negotiations with its lenders at the same time it tries to cut costs with its landlords. 

The missed interest payments will spur speculation of a bankruptcy filing. But WeWork says it has the cash on hand, and the company has a 30-day grace period to make the payments, which were due Monday. 

At the end of June, it had $205 million in cash and access to a credit line worth $475 million. Skipping an interest payment is not necessary to negotiate with lenders. But indebted companies sometimes use the move to put pressure on lenders to restrike deals under more favorable terms. 

From its inception in 2010 to its collapse in 2023, WeWork's journey has been a roller-coaster. Once valued at $47 billion dollars, the company today, is on the verge of bankruptcy. How did the Venture Capital backed co-working company, end up as the biggest financial bonfire in Venture Capital history?

VC Funding: Why Startups Are Failing to Raise Cash

After years of venture capital flowing freely into early-stage tech companies, investors are getting pickier.

That’s forcing founders to make tough decisions and causing more of them to shut down. 

WSJ Pro Venture Capital reporter Yuliya Chernova joins host Zoe Thomas to discuss the landscape for startup funding and what it's like to be a founder these days.