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When To Throw In The Towel

We need to talk about failure. The thing no one wants to discuss in our rah-rah, unicorn-obsessed startup world. The fact is: 90% of startups fail – especially early-stage tech startups. It’s a numbers game. And if you’re reading this, odds are you’re heading that way too. Harsh? Maybe. But I’ve been there – multiple times, as a founder and as an investor. I’ve seen the signs. I’ve felt the pain. And I’ve learned when it’s time to cut your losses. So how do you know when to throw in the towel?

10 Signs You Should Call It Quits

1. You’re Out of Runway

Cash is oxygen. Without it, you die. If you’re down to your last month of runway, it’s time to face facts. You’ve got three options:

  • Raise more money
  • Get profitable fast
  • Shut it down

If you can’t do #1 or #2, your choice has already been made for you. Don’t wait until you’re out of cash. That’s irresponsible. Pay your employees. Pay your debts. Exit with dignity.

2. Your Growth Has Flatlined

Startups need exponential growth. If you’ve plateaued, that’s a red flag – and a big one. Maybe you’ve saturated your market. Maybe your product isn’t as good as you thought. Either way, if you can’t reignite growth, you’re in trouble. Don’t mistake activity for progress. Busy doesn’t mean successful.

3. Your Team is Jumping Ship

Your people know. Trust me, they know.

If key team members are leaving, pay attention. They’re voting with their feet. One departure might be nothing. Two might be a coincidence. Three is a trend. Don’t ignore it. Don’t rationalize it. Listen to what it’s telling you.

4. You’ve Lost the Fire

Burnout is real. Founder depression is real. If you’re no longer excited about your company, that’s a problem. A big one. You can’t fake passion. You can’t manufacture drive. If it’s gone, it’s gone.

Be honest with yourself. If you’re dreading Monday mornings, it might be time to walk away.

5. Your Metrics Are Lying

Data doesn’t lie, but it can mislead. Are you focused on vanity metrics? User signups mean nothing if they’re not translating to revenue. Be ruthless in your analysis. Don’t cherry-pick data to support your narrative. If you’re not measuring what matters, you’re just deluding yourself.

6. You’re Pivoting in Circles

Pivots can save a company. They can also prolong their death. If you’re on your third or fourth pivot, take a good, hard look at what you’re doing. Are you solving a real problem? Or are you desperately searching for product-market fit?

There’s a fine line between persistence and delusion. Know which side you’re on.

7. Your Investors Have Gone Silent

No news isn’t good news. It’s bad news. If your investors have stopped returning your calls, that’s a sign. They’ve written you off. Don’t expect them to tell you it’s over. That’s your job to figure out. If you can’t get a meeting, read between the lines.

8. You’re No Longer Learning

Failure is fine if you’re learning. It’s how we grow. But if you’re just treading water, you’re wasting time. Yours and everyone else’s.

Ask yourself: What have I learned in the last six months? If the answer is “not much,” it might be time to move on.

9. Your Personal Life is in Shambles

Startups are all-consuming. But they shouldn’t destroy you. If your relationships are crumbling, your health is deteriorating, or you’re losing yourself, it’s time to reassess.

No business is worth your well-being. Full stop.

10. You’ve Got a Better Idea

Sometimes, the best thing you can do is start over. If you’ve got a new idea you can’t stop thinking about, pay attention to that.

Don’t let sunk costs keep you tied to a failing venture. Be brave enough to start again.

Knowing when to quit is just as important as knowing when to persevere

There’s no shame in failure. Everything is an opportunity – all you can do is recognize it and act accordingly. Remember, every “no” gets you closer to a “yes.” Every failure teaches you something new.

So if it’s time to throw in the towel, do it. Do it with grace. Do it with honesty. And do it with the knowledge that this isn’t the end. It’s just the beginning of your next chapter.

Now get out there and fail forward. The startup world needs more honest failures and fewer walking dead. Your next big idea is waiting. Don’t let a dying startup hold you back from finding it.

Enjoy the ride.