You’ve probably heard the statistic a thousand times:
90% of startups fail.
It’s repeated like gospel in boardrooms and podcasts. The message is clear: Most startups will flame out, taking your capital with them.
But for smart investors, what if this “common wisdom” is more myth than reality?
Last week, we looked at Abundance — a hedge fund using AI to pick winning stocks. So here’s the natural follow-up question: Could AI also be used to pick winning startups?
In today’s article, I’ll tackle this question head-on. Then I’ll share the investment approach we take at Private Market Profits.
As you’re about to learn, our results smash the 90% failure narrative into bits.
The Brutal Math of Startup Survival
Let’s start with the numbers everyone quotes.
According to sources including CB Insights and the U.S. Bureau of Labor Statistics, roughly 90% of startups ultimately fail. 10% don’t even make it through the first year.
It’s sobering. No wonder so many investors stick to public markets and index funds.
But here’s what the headlines rarely mention: Those aggregate failure rates don’t tell the full story — at least, not for disciplined investors who apply a rigorous system.
Our Blue-Ribbon Track Record
At Private Market Profits, we’ve been recommending startup investments to individual investors like you since June 2016. Here are the results:
We’ve made 119 picks over that period — one per month.
- 41 are already in the black — through realized exits (M&A or IPO), or through unrealized gains from “up” rounds.
- Another 50 are operating as usual, with many showing significant traction.
- And just 14 have shut down, for an approximate 11.7% loss rate.
This is a dramatically different picture than the 90% failure rate the industry throws around. And meanwhile, look at the gains from some of the winners:
Our hits include a 40-bagger, a 15-bagger, an 11.8-bagger, as well as several other big winners that would make most public-market investors jealous.
If you’re a paid-up member of Private Market Profits, you can see the full list on our Portfolio page. And in case you’re not a member yet, this screen-shot shows the top ten gainers:
How We Do It: AI + Human Judgment
How have we been able to beat the odds so consistently?
It’s not pure AI magic. And it’s not gut instinct alone. Instead, it’s a hybrid.
For starters, we built proprietary software and AI tools. Our systems can scan thousands of deals, flag patterns, crunch traction metrics, monitor competitive landscapes, and surface opportunities that fit our criteria. This helps us process information faster and deeper than any team of analysts ever could — much like the AI agents at Abundance are doing for stocks.
But here’s the thing: We don’t hand the final decisions over to the machines.
Every recommendation that goes out to Private Market Profits members also gets a full layer of human-powered fundamental analysis.
This is where our team takes the time to dig into the founders and their track records, unit economics, the defensibility of the technology, market timing, and — critically — the Risk of Ruin. (If you missed my article on our Risk of Ruin indicator, it’s worth a read — this is one of the tools that keeps us from chasing shiny objects with fatal flaws.)
AI gives us breadth and speed. Human judgment provides the nuance, pattern recognition, and skepticism that comes from decades of experience in the private markets. Together, they create a system that’s more robust than either approach on its own.
In short, we use AI to augment human insight, not replace it. And our results show it works.
Why This Matters for You Right Now
The AI wave is accelerating.
Tools that once seemed futuristic are now helping investment teams cut through the noise.
But in the opaque world of startups — where data is messy, information is asymmetric, and narratives can be misleading — pure AI has limitations. The winners will be those who know how to combine machine-scale analysis with seasoned human oversight.
That’s the edge we’ve been honing for nearly a decade at Private Market Profits.
So, if you’re tired of watching from the sidelines — or if the misleading “90% fail” message has stopped you from dipping your toes in — here’s your invitation to see what a disciplined, hybrid approach can deliver.
If you’re not a member, click here to learn about Private Market Profits and get our latest recommendations. Or give us a call at 1-844-311-3191.
Stay tuned — more opportunities are on the way.
Happy Investing
Founder
Crowdability.com
