With all the risks that startups face, there is certainly the risk of bankruptcy. According to the Bureau of Labor Statistics, over 20% of startups fail within two years and 50% within five years. Clearly the risk of the startup ultimately failing is very real and must be taken into account in making an investment decision.
To counteract this risk, Florida Funders performs an extensive vetting and due diligence process with each company seeking funding, with the goal of having a significantly lower failure rate than the national averages. Additionally, the impact of bankruptcy risk on an investor’s portfolio can be minimized with diversification.