A $1B Exit Is 8x Harder Than Getting into Harvard. A $10B Exit Is 56x Harder.
Last week I shared our estimation of the 500 most valuable exits over the past 25 years, based on ~100,000 venture-backed companies. A few of you pushed back on the valuation methodology – e.g. for companies that exited via IPO, we used the value as of the market close last Friday.
Some of you pointed out that VCs generally can and do sell at the expiration of the lock-up, roughly 6 months after the IPO. Thanks to Dan Rosen and Josh Kopelman for pushing on this. It’s a fair point, and worth its own re-cut of the data.
Consider this the “VC view” of the data. Every IPO exit is now valued at its market cap ~6 months post-IPO.
Some interesting observations:
The typical company on this list barely moved: $2.6B median at the 6-month mark versus $2.7B today. The average is approximately $10B because there are some massive outliers (power law baby!).
The winners get more extreme the longer you hold: Tesla was worth ~$2.5B six months after its 2010 IPO (good enough for 200s on our list) and is worth ~$1.47 trillion today, a top-3 company and a ~580x move. Meta was ~$60.7B six months after its 2012 IPO (already top 5) and is $1.68 trillion now, about 28x.
But it cuts both ways: GoPro was worth $8.2B six months post-IPO (a top-100 company) and is worth ~$119M today, also below the $1B bar.
$775M was the cutoff to make the top 500 list, meaning you don’t even have to exit for $1B to make the top 500!
and … WeWork makes an appearance on this new cut of the data 🙂
I also want to flag a point Brian Hirsch made on the original post: this list almost certainly undercounts the total universe of $1B+ outcomes, as it doesn’t count some SPACs, secondaries, or other creative structures that are harder to track. Even an AI era, its hard to be perfectly precise.
Nonetheless, across 25 years, about .5% of VC backed companies exit for over $1B. About 70 clear $10B, which is what it takes for a $1B fund to return itself from one position (assuming 10% ownership).
Harvard’s undergraduate acceptance rate is around 4%. Clearing the $1B bar is already about 8x harder than that. Clearing $10B is about 56x harder than getting into Harvard. The odds get infinitely worse as you add zeroes.
Obviously looking at probabilities tells only part of the story, but hopefully helpful to managers and LPs as they think through their strategies.
