Industries With Most Dead Start-Ups

• Technology companies have the worst survival rate, with 1 in 4 tech startups shutting down within their first year.
• Both the transportation and utilities sectors see 23% of startups fail in their first year, but surviving transportation firms have 6-year shorter lifespans.
• Mining & oil startups face double trouble with both high failure rates of 22% and employment decrease.

Over 20% of American businesses fail within their first year, yet certain industries present significantly higher risks for entrepreneurs. A new study by CasinooftheKings analyzed major US business sectors to identify which industries have the highest startup failure rates.

The research examined three business performance indicators, including one-year failure rates, average company age, and recent job growth across. The study developed a scoring system that identifies which sectors present the greatest risks for new businesses, with higher scores indicating increased chances of startup failure.

Here’s a look at the industries with the highest startup failure rates in 2025:

Information technology ranks first as America’s riskiest industry for startups. More than a quarter of new tech ventures shut down within their first year of operation, giving the sector the highest failure rate in the study. The tech companies also show the weakest employment growth at just 0.1% and have the second-shortest lifespan, lasting just 9 years on average.

Transportation takes second place in startup failure statistics, with 23% of new companies closing in their first year. These firms last an average of 12 years, well below more stable sectors, and have seen 1.2% employment growth over the past year.

The mining and oil industries are in third position. The resource sector sees 22.1% of startups collapse in their first year, while also experiencing an employment decrease of 1% across the industry. The surviving firms usually last 15 years on average, though this likely reflects established players rather than startup success.

Construction ranks fourth, as the building sector loses 21.8% of new ventures within 12 months. Construction companies typically operate for 13 years, placing them in the middle for business longevity, while the sector shows 1.2% job growth.

Utilities hold fifth place in the startup risk rankings. Despite having companies that operate for nearly 18 years on average when they survive, the sector still loses 23% of new ventures in their first year. The utilities industry also reports a lower 1.1% employment growth in the last 12 months.  

Education has the sixth-highest startup failure rate. 19% of new businesses in education shut down within their first year, while surviving companies typically last just 11 years, the third-shortest lifespan in the study. Education shows 1.1% annual job growth, identical to the utilities sector.

Finance ranks seventh in startup risk. The industry sees 18.8% of new firms close within their first year, nearly one in five, and businesses that remain open operate for 14 years on average. Financial services also post low employment expansion at just 0.8%.

Manufacturing holds eighth place, with factory startups facing an 18.6% first-year failure rate and showing 0.9% job losses last year. This makes manufacturing one of only two sectors with declining employment. The companies that survive in this industry typically operate for 17 years.

Real estate ranks ninth in startup failure statistics. Property businesses face a 17.1% first-year failure risk and show 1.9% employment growth in the last 12 months. Real estate firms usually operate for 12 years on average.

Healthcare completes the top 10 riskiest industries for startups. Medical businesses have a lower failure rate at 15.2% and have posted a 2.9% employment growth last year. Despite relatively promising stats, healthcare companies last 10 years on average, which is one of the shortest lifespans in the study. 

“The startup world focuses too much on trendy tech while missing safer options,” says CasinooftheKings spokesperson. “Many founders ignore stable industries where they could actually succeed. Sometimes, a smarter approach is to look for basic businesses that solve real needs. Creating the next social app is far riskier than fixing everyday problems that people will always pay for. Industry choice and market timing often determine success more than having a revolutionary idea.”