What assumption can be made regarding the nature of new companies?

The assumption regarding new companies being more likely to fail than established companies is based on various factors inherent in the business landscape. Startups often face significant challenges such as limited resources, lack of brand recognition, and the hurdles of navigating market competition and consumer demand.

Established companies typically have a proven track record, stable customer bases, and established processes that contribute to their resilience. In contrast, new businesses may struggle with building a sustainable business model and acquiring customers. Historical data supports the notion that a substantial percentage of new ventures do not survive past their first few years, reinforcing the idea that these companies are inherently at a greater risk of failure compared to their more established counterparts.

While innovation, funding opportunities, and novelty can indeed apply to new companies, the defining characteristic that aligns with the highest level of assumption backed by empirical evidence is their relative instability and increased likelihood of failure in the early stages.