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Why smaller firms face higher failures: BCG study of 30,000 US firms reveals key risks
A new Boston Consulting Group study of 30,000 US-listed companies finds the five-year risk of delisting dropped from roughly 40 percent in 2002 to 18 percent in 2025. The consultancy defines failure as leaving a public exchange through bankruptcy, acquisition or going private, which does not always mean investor losses. The decline stems from stricter listing rules after the Sarbanes-Oxley Act, longer private funding runways and low interest rates that helped weaker firms refinance. Smaller and younger companies still face the highest danger, with the failure-risk gap between the smallest and largest firms widening to about 25 percentage points during crises. Rising borrowing costs, deregulation and IPO booms are the main triggers that push vulnerable businesses off exchanges. BCG advises companies to preserve cash, stress-test investments and seek opportunities when weaker competitors struggle.
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Why smaller firms face higher failures: BCG study of 30,000 US firms reveals key risks
A new Boston Consulting Group study of 30,000 US-listed companies finds the five-year risk of delisting dropped from roughly 40 percent in 2002 to 18 percent in 2025. The consultancy defines failure as leaving a public exchange through bankruptcy, acquisition or going private, which does not always mean investor losses. The decline stems from stricter listing rules after the Sarbanes-Oxley Act, longer private funding runways and low interest rates that helped weaker firms refinance. Smaller and younger companies still face the highest danger, with the failure-risk gap between the smallest and largest firms widening to about 25 percentage points during crises. Rising borrowing costs, deregulation and IPO booms are the main triggers that push vulnerable businesses off exchanges. BCG advises companies to preserve cash, stress-test investments and seek opportunities when weaker competitors struggle.