20 Failed Startups that Mismanaged Funds
Countless startups around the world are being launched every week.
Many fail because they did not learn from the success of other companies who've managed to rise above.
We just published this list of 20 startups that failed due to mismanaging funds, along with analyses on why they shut down and interviews with their founders.
20 Failed Startups that Mismanaged Funds
1) Auctionata
Auctionata was an online auction platform for art and luxury. Their issues originated from unethical behavior, lack of transparency, and lies by the CEO.
Details of the startup:
- Founders: Alexander Gilkes, Alexander Zacke, Georg Untersalmberger, Susanne Zacke
- Country: Germany
- Industry: e-Commerce
- Started in: 2012
- Closed in: 2017
- Nº of employees: 250-500
- Funding Amount: > $50M
You can read more about their failure here.
2) Beepi
Beepi was a marketplace for used cars. They ran out of cash to operate and tried to sell to potential buyers, but didn't achieve to close the operation.
Details of the startup:
- Founders: Ale Resnik, Owen Savir
- Country: United States
- Industry: Transportation
- Started in: 2013
- Closed in: 2016
- Nº of employees: 100-250
- Funding Amount: > $50M
You can read more about their failure here.
3) Crowdmix
Crowdmix was a music streaming platform where people could listen and talk about their favorite bands. They spent £14M before having a working product.
Details of the startup:
- Founders: Gareth Ingham, Ian Roberts
- Country: United Kingdom
- Industry: Music
- Started in: 2013
- Closed in: 2016
- Nº of employees: 100-250
- Funding Amount: $10M-$50M
You can read more about their failure here.
4) DotCloud
dotCloud was a PaaS for developers that enabled them to host, assemble and run their applications. They could not sustain operation costs by themselves.
Details of the startup:
- Founders: Solomon Hykes
- Country: United States
- Industry: Software & Hardware
- Started in: 2008
- Closed in: 2016
- Nº of employees: 250-500
- Funding Amount: $10M-$50M
You can read more about their failure here.
5) Fuhu
Fuhu was a seller of cloud-served software. After reaching Top 1 on Inc 500, the company amassed an enormous amount of debt and had a very high burn rate.
Details of the startup:
- Founders: John Hui, Robb Fujioka, Steve Hui
- Country: United States
- Industry: Software & Hardware
- Started in: 2006
- Closed in: 2015
- Nº of employees: 500-1,000
- Funding Amount: > $50M
You can read more about their failure here.
6) Radar Radio
Radar Radio, a hub for emerging music talent online, ceased operations amidst a debt of £3.6M. Here's their story.
Details of the startup:
- Founders: Ollie Ashley
- Country: United Kingdom
- Industry: Entertainment
- Started in: 2008
- Closed in: 2018
- Nº of employees: 10-50
- Funding Amount: $0
You can read more about their failure here.
7) RewardMe
RewardMe was a real-time intelligent CRM Platform for Local Commerce. They wanted to scale up the company prematurely, which lead to their shut down.
Details of the startup:
- Founders: Jun Loayza, Stephen Johnson, Yu-kai Chou
- Country: United States
- Industry: Marketing
- Started in: 2010
- Closed in: 2015
- Nº of employees: 10-50
- Funding Amount: $1M-$10M
You can read more about their failure here.
8) SchoolGennie
SchoolGennie provided solutions that saved time, reduced costs, and helped make better decisions on schools. But they didn’t test their product-market fit.
Details of the startup:
- Founders: Amit Gupta, Pardeep Goyal
- Country: India
- Industry: Education
- Started in: 2013
- Closed in: 2014
- Nº of employees: 1-10
- Funding Amount: $0
You can read more about their failure here.
9) Skully
Skully was a helmet targetting motorcycle riders. They had to close shops due to no fundings and couldn't complete the production of the pre-orders.
Details of the startup:
- Founders: Marcus Weller, Mitch Weller
- Country: United States
- Industry: Transportation
- Started in: 2013
- Closed in: 2016
- Nº of employees: 10-50
- Funding Amount: $10M-$50M
You can read more about their failure here.
10) Theranos
Theranos was a way to predict diseases with small blood samples. They raised $1.4B but legal investigations pointed out it was a fraud and shut down.
Details of the startup:
- Founders: Elizabeth Holmes
- Country: United States
- Industry: Health
- Started in: 2003
- Closed in: 2018
- Nº of employees: 10-50
- Funding Amount: > $50M
You can read more about their failure here.
11) Tilt
Tilt was a social payments startup. The CEO was believed to become the next Zuckerberg. However, lack of focus led to shutting down their operations.
Details of the startup:
- Founders: James Beshara, Karolyn Baxter, Khaled Hussein
- Country: United States
- Industry: Finances
- Started in: 2012
- Closed in: 2017
- Nº of employees: 100-250
- Funding Amount: > $50M
You can read more about their failure here.
12) Utrip
Utrip was a travel planning startup that used AI to create personalized itineraries. Keeping the recommendation engine alive was too much for them.
Details of the startup:
- Founders: Gilad Berenstein, Yair Berenstein
- Country: United States
- Industry: Travel
- Started in: 2012
- Closed in: 2019
- Nº of employees: 10-50
- Funding Amount: $1M-$10M
You can read more about their failure here.
13) WOW Air
WOW Air was the Icelandic answer to RyanAir for low-cost air travel in Europe. The cause of failure was that they wanted to become too big too fast.
Details of the startup:
- Founders: Skuli Mogensen
- Country: Iceland
- Industry: Transportation
- Started in: 2011
- Closed in: 2019
- Nº of employees: 50-100
You can read more about their failure here.
14) Zirtual
Zirtual was a virtual assistant marketplace for busy entrepreneurs. Its management and the high burn rate brought the firm on the verge of bankruptcy.
Details of the startup:
- Founders: Collin Vine, Erik Jensen, Maren Kate Donovan
- Country: United States
- Industry: Software & Hardware
- Started in: 2011
- Closed in: 2015
- Nº of employees: 100-250
- Funding Amount: $1M-$10M
You can read more about their failure here.
15) Adleaf Technologies
Back in 2013, Chetan Vashistth founded his first startup business called “Adleaf Technologies”, a blend of programming bootcamps and software solutions. Business was good for a while, but the challenge of multiple bad business decisions paired with failed money management proved to be the business’s demise. In this interview, we will talk about the lessons Chetan learned the hard way.
Details of the startup:
- Founder: Chetan Vashistth
- Country: India
- Industry: Education
- Started in: 2013
- Closed in: 2014
You can read more about their failure here.
16) Gawkbox
GawkBox was a platform where viewers of live streams could play mobile games to donate real money to streamers. Chris co-founded this as his first startup and he was able to successfully raise $4.4M in venture funding, which the startup invested in marketing until they achieved 500k users and more than $1M in revenue. However, multiple mistakes and a series of reasons led to their shut down.
Details of the startup:
- Founder: Christopher Brownridge
- Country: United States
- Industry: Entertainment
- Started in: 2016
- Closed in: 2019
You can read more about their failure here.
17) Lernin Games
Jordi Miró has been building products and companies since 2007. After a successful CTO experience in Wuaki TV, he founded Lernin Games, an EdTech startup focused on toddlers. He raised €1.5M and built a team of 10, but Lernin ran out of cash and the project couldn’t succeed.
Details of the startup:
- Founder: Jordi Miró
- Country: Spain
- Industry: Education
- Started in: 2017
- Closed in: 2019
You can read more about their failure here.
18) NOX
Jeremiah is an ex-entrepreneur who co-founded NOX, a nightlife app that allowed users to book events, services, and VIPs. The 5-person-team raised $90,000 from several angel investors but had to pivot into an e-commerce platform for alcoholic beverages, which was eventually making $20,000/month. However, the lack of both financial discipline and ideas to scale led to its failure.
Details of the startup:
- Founder: Jeremiah Lam
- Country: Singapore
- Industry: e-Commerce
- Started in: 2015
- Closed in: 2018
You can read more about their failure here.
19) Vulpine
Derric Haynie is an entrepreneur based in Oakland, California who, years ago, launched Vulpine Interactive, a social media and advertising agency. Peaking at 10 clients, $40k/mo and 5 employees, things were expected to keep going well. However, they ended up shutting the business and walked away with $70k in debt. Learn what happened!
Details of the startup:
- Founder: Derric Haynie
- Country: United States
- Industry: Social Media
- Started in: 2013
- Closed in: 2018
You can read more about their failure here.
20) Zapstream
Zapstream was a social live streaming platform, which competed with Meerkat and Periscope. The startup raised $1m from angels and grew from 0 to 100k users. However, a combination of dwindling engagement, mismanagement of money, and the inability to fundraise further, led to their shut down.
Details of the startup:
- Founder: Devan Sood
- Country: United States
- Industry: Social Media
- Started in: 2015
- Closed in: 2016
You can read more about their failure here.
