5 Brutal Lessons About Tech Investing They Don’t Teach You in School.

Read time: 2.5 minutes

Brutal Lesson #1 – Most Startups Die:

Fact: 70% of startups fail between their second and fifth year. (Equidam, 2025)
Reality Check: Losing money is a common aspect of tech investing. Many startups you back will fail.
Fix: Diversify your portfolio, carefully vet founders, and actively manage risk.

Brutal Lesson #2 – Hype = Trap:

Fact: A billion-dollar valuation might grab headlines, but it doesn’t guarantee success. (One Young India, 2025)
Reality Check: Media attention and buzz can be misleading. Popular startups aren’t always profitable.
Fix: Always verify the fundamentals, including revenue, team quality, and market potential, before investing.

Brutal Lesson #3 – Burn Rate Kills:

Fact: Running out of cash is a common reason startups fail. (J.P. Morgan, 2024)
Reality Check: No matter how innovative, a startup can die if it runs out of cash.
Fix: Track burn rate, runway, and margins carefully to avoid costly mistakes.

Brutal Lesson #4 – Tech Alone Won’t Save You:

Fact: 42% of startups fail because they build products with no market need. (TST Technology, 2024)
Reality Check: Brilliant technology is useless if no one wants or needs it.
Fix: Focus on product-market fit, validate your idea, and iterate fast.

Brutal Lesson #5 – Your Network Is Your Edge:

Fact: 80% of startup founders say networking is vital to success. (Startups Magazine, 2025)
Reality Check: Deals, partnerships, and exits often come from relationships, not tech.
Fix: Build your network through mentors, co-investors, and founders to gain access to opportunities.

Key Takeaways:

1. Diversify investments and vet founders before committing capital.

2. Don’t chase hype; evaluate fundamentals like revenue, team, and market size.

3. Monitor cash flow and runway to prevent avoidable failures.

4. Ensure strong product-market fit before scaling technology.

5. Build and leverage your network. Strong relationships drive deals and exits.