No one likes seeing a startup fail. So why do most startups fail? Contrary to popular belief, most startups do not fail because they run out of money. Yes, cash flow is often the reason that the business ultimately closes, but the number 1 reason that most startups fail is that the founder quits. Be it a loss of faith, loss of interest, loss of innovation, however you see it; it is the founder’s mentality that almost always fails the startup.