Disclosure: the author heads the analytics team at SWC Field, the project showcase platform discussed in this article.
Most startups don't fail suddenly. CB Insights studied 431 venture-backed companies that shut down since 2023. In 70% of cases they ran out of money, but that is the ending, not the cause. The real reasons showed up earlier: poor product-market fit (43%), bad timing (29%) and unit economics that never worked (19%). Much of this can be spotted before anyone commits money, if you know where to look.
At SWCField, our analysts review every project before we present it to our community. Over the last three months, 40 projects applied. Seven made it to the final stage. Here is where the other 33 stopped, and what that says about the projects raising money today.
Stage 1: Who actually owns this? 6 rejected
The fastest check is also one of the most revealing. Most often, it is simply unclear who is raising the money. There is no legal entity, or there is one, but it doesn't match the pitch deck: the platform, the code and the brand belong to one person, while the money is being raised for another company. Sometimes founders can't say in a meeting whose name the product is registered under. At that point, analysing the economics is pointless: there is nothing to invest in.
Stage 2: Does the model survive its own numbers? 11 rejected
We rebuild every financial model ourselves. Most models fail not on our assumptions but on the project's own figures. Spreadsheets with hard-coded numbers instead of formulas. A deck showing revenue twice as high as the model. Construction costs of 5 million in one document and 15 million in another. Profit divided by 80 units while revenue is calculated on 100. In one case, a deck promised 190% annual returns; recalculating from the payment schedule in the project's own spreadsheet gave 89%.
Stage 3: Licences that aren't licences. 5 rejected
Our lawyers check applicable law, collateral, sanctions lists and tax. The most common finding: materials say "regulated" or "supervised", but in reality it is an anti-money-laundering registration, membership of an industry association, or a certificate from a private consultancy presenting itself as a regulator. The second most common issue: the product, as described, cannot legally be sold where the company plans to sell it.
Stage 4: A good business, the wrong terms. 11 rejected
This is where we turn down the most projects that looked good until then. They had clear ownership, working economics and a clean legal picture. We compare the terms with alternatives of similar risk and look at what happens if the project stops halfway. One example: trade finance for copper shipments from Africa to China. The structure was clear and all parties were named. But the scheme had no completed trade cycles yet, and the second phase required the financing side to post cash collateral, meaning participants would lose money first if the chain broke. The return for that risk was no higher than for deals without collateral. Our decision: not to present it until the pilot cycle is completed and shows real numbers.
Why the work matters
One of the most cited studies of private investing, by Robert Wiltbank and Warren Boeker for the Kauffman Foundation, looked at more than 1,100 angel investment exits. Investors who spent less than 20 hours on due diligence got back on average 1.1 times their money. Those who spent more than 20 hours got 5.9 times; 40 hours or more, 7.1 times. It's a correlation, not a guarantee. More than half of all exits in the study returned less than was invested. But careful analysis is one of the few factors an investor fully controls.
Five questions to ask any project
Who is the ultimate owner, and why does every intermediate company in the structure exist?
Can I see the financial model, with formulas?
Where will revenue growth come from: which customers, which channels?
What will taxes, fees and currency conversion do to my returns?
What happens if the project stops halfway, and can I exit early?
And one habit worth building
Put two versions of a project's documents side by side. If, in the "updated" deck, some features have quietly moved from "live" to "planned", nobody will mention it in the email. Usually it means the first version was written to sell, and the second appeared after someone asked questions.
You can read more about how we evaluate projects and register for the upcoming pitch day here.
Not investment advice. SWCField does not raise funds and is not a party to any transaction. Participating in projects involves risk, including total loss of funds.
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