Two Years of Startup Exits

An unrepresentative, statistically insignificant, but still interesting peek at the current M&A market

🔌 Power laws work for VCs

The lion’s share of our fund’s returns from a returns POV has come from large, well-known exits (mostly IPOs). It’s no wonder that most funds are getting bigger. The “lean into your winners” and “billion or bust” strategy works well for VCs.

🧠 But founders SHOULD NOT think like VCs

Founders don’t have a portfolio of startups to spread financial risk. There’s no hedging at a startup.

🔕 Because most exits are modest

The median exit value from this sample was $44M.

👛 And “small” exits can make founders rich

If appropriately capitalized, a <$100M sale can be HUGE for founders.

🥞 Also, the quick flip is a mirage

Our data also showed that the average time to exit was 7.5 years.

🚪 Fundraising is easier than exiting

Almost 60% of the companies that exited our portfolio in 2020 did so for a sum lower than the average pre-money valuation for a Series A in 2020.

💥 Failure is an option

Despite being in a sustained tech boom, five of the 19 companies from our portfolio that exited delivered no value. Unfortunately, there is little press about these unfortunate outcomes, but it’s important to remember that startups can and do fail.

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Our mission is to be the most aligned VC for founders at seed. #ProudInvestor in @Uber @TheTradeDeskinc @Buzzfeed @Cruise @Diaandco @PillPack @SeatGeek & more.

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Founder Collective

Our mission is to be the most aligned VC for founders at seed. #ProudInvestor in @Uber @TheTradeDeskinc @Buzzfeed @Cruise @Diaandco @PillPack @SeatGeek & more.