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Company Y raised $5M in Seed funding from a reputable Singapore fund in March 2024. By November 2025, they had run out of money and shut down. This post-mortem analysis was conducted with the consent and contribution of two of the three co-founders.
The goal isn't to assign blame — it's to understand so our community doesn't repeat the same mistakes.
5 Root Causes
1. False product-market fit: They had early traction but from early adopters — not mainstream customers. When they expanded, conversion rates collapsed. 2. Unit economics that never worked: CAC was too high relative to LTV. They knew this but believed scale would improve it. Scale only amplified the problem. 3. Silent co-founder conflict: Two of three founders fell out of alignment by month 8. Instead of addressing it directly, they avoided it — slowing decisions and creating team silos. 4. Early fundraising created false confidence: With $5M in the bank, pressure to improve metrics decreased. They spent aggressively before validating unit economics. 5. Regulatory surprise: In month 14, MAS issued new licensing regulations they didn't have. The application took 9 months — the company had no runway left to wait.
“What I regret most isn't that the company failed — it's that we knew these problems early but didn't have the courage to face them directly.”