Big exits are important for venture investors because they require large distributions to make up for any underperforming investments.

How much capital is burnt to get to those big exits impacts the return multiple a venture investor will realize.

Startups that grow in a capital efficient manner and achieve a big exit become the real needle movers for a venture investor’s portfolio.

Let’s dive into some of the best research in looking at the top-down exit numbers in the venture capital landscape to see how this has played out in the past.


Let’s start by looking at what qualifies as a big startup exit.

According to CB Insights 2016 Global Tech Exits Report where they summarize what they found from analyzing 3,358 startup exits, 54% of startup exits were below $50M while 22% were above $200M.

Even for small early-stage VC funds, it is unlikely that distributions realized from exits below $50M will move the needle for investor returns.

It’s the bigger $200M+ exits that can move the needle, especially the 10% of exits which are greater than $500M.


So how long does it typically take for a startup to get to a big exit?

According to SaaStr’s research, the average time it has taken for a startup to get to a $1B+ exit has been 11.7 years.

There also appears to be some correlation where the less capital a startup raised, the longer it took them to get to a $1B+ exit. A great example of this is Mailchimp which sold to Intuit for $12B after bootstrapping their business for 20 years!


To achieve big exits, venture investors must often hold their portfolio equity positions for ten or more years.

Given the long hold times, what are some of the leading indicators that a venture investor may use to determine if startups in their portfolio could be on track to get to deliver a big exit?
1) Has the portfolio startup demonstrated an ability to deliver capital efficient growth over a long period of time? (strong indicator)
2) Is the portfolio startup achieving high Net Revenue Retention from its customer base and is the high NRR likely to continue for a long period of time? (strong indicator)
3) How consistent is the growth of the portfolio startup quarter over quarter, year over year? (moderate indicator)
4) Does the portfolio startup have significant expansion revenue opportunities as it scales? (moderate indicator)


How should this impact early-stage investors decision-making framework?

Expect for venture capital portfolios to take significant time to mature when making fund investments.

Patience is required to maximize your equity in startup investments.

As the saying goes, the way you go broke in venture capital is selling your equity in your winners too early.

July Newsletter
Great North Ventures

iraLogix closes $22M + Branch expands with Uber

iraLogix Closes Series C
Great North Ventures

iraLogix closes $22M Series C

June Newsletter
Great North Ventures

Flywheel lands Gates Foundation grant

We're Hiring
Great North Ventures

Venture Capital Analyst

May newsletter
Great North Ventures

$40M Fund II Raised!

Investment Thesis: Community-Driven Applications
Great North Ventures

Investment Theme: Community-Driven Applications

Fund II Theses: Solving Labor Problems
Great North Ventures

Investment Theme: Solving Labor Problems

Great North Ventures

Mike Schulte Promoted to Venture Partner

Great North Ventures

New Name + New Venture Studio

Great North Venture Labs
Great North Ventures

Great North Launches Startup Studio

Giving in the Time of Coronavirus
Great North Ventures

Giving in the Time of Coronavirus

capitol building
Great North Ventures

COVID-19 Resources for Startups, State-by-State

March Newsletter
Great North Ventures

COVID-19, the CARES Act, and startups stepping up

New Business Preservation Act
Great North Ventures

New Business Preservation Act

Startup Summit 2020
Great North Ventures

Great North Labs’s Startup Summit 2020

Great North Ventures

MinneBar 14 Recap

Tech Madness 2019
Great North Ventures

Dispatch and 2ndKitchen claim Tech Madness titles

Great North Labs at CES
Great North Ventures

Great North Labs at CES

Top Posts 2018
Great North Ventures

Carried Interest: Top Posts from 2018

engineer and various business information. Internet of things industry.
Pradip Madan

IoT 3.0

Healthcare innovation image
Great North Ventures

Healthcare Innovation

St. Paul city skyline
Great North Ventures

Great North Labs Featured in St Cloud Times

Ryan Weber teaching incubator class
Great North Ventures

Great North Labs – Featured on