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I was further out than you thought,

And not waving but drowning

—Stevie Smith

New ventures are invariably founded with a sense of optimism for the future, whether justified by preliminary research or not. Although most of our management thinking concerns success, it is equally important to consider the consequences of the statistically likely outcome that the venture will not be successful or that the founders will not necessarily share in the firm's successes.

Definitions of failure usually identify discontinuance and financial loss as prime aspects, frequently identified as bankruptcy or insolvency depending upon the firm's legal status. In many ways the term failure is unnecessarily pejorative, because it is economically sensible to close a business once its distinctive skills and competencies do not best serve a changing environment. ...

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