ABSTRACT
The founders must also be aware of the “liability of newness.” New ventures historically have a high propensity to fail. The high failure rate of the ventures is due primarily to three reasons:
1. The founders are incapable of adjusting to their new roles. 2. The firm lacks a “track record” with outside buyers and sellers. 3. Failure to assemble a talented and experienced founding team of
risk-takers.
