How many Silicon Valley startups succeed? Is it true that a <$10MM exit is considered a failure?

echojason@gmail.com'

JASON LEMKIN

The definition of “success” in Silicon Valley is kind of brutal.

As a personal example, I sold my first start-up for $50m — just 12.5 months after founding. Not too shabby, right? But not a single one of my VC investors (who 5x’d their money in a year) even bothered to drive from Woodside to downtown Palo Alto for the closing dinner. And while the technology went on to save hundreds of lives, and impact thousands … only a handful of folks in Silicon Valley would call it a true “success”. The company never really had a brand on its own, let alone one that has been forgotten to the dustbins of startups that were.

Don’t flame me too much, don’t shoot the messenger, and I know it’s context sensitive … but …

I’d suggest that if you ask successful founders and VCs, privately — they’d answer a true success is an exit of at least $250m for a start-up people have heard of, or $400m+ for one no one has every heard of. I know.

Silicon Valley is a Go Big culture. VCs are looking for unicorns. Snapchat passes up $2b+ from Facebook. Salesforce is worth $50b+. The co-founder of Workday regrets selling his last company (in a hostile takeover) to Oracle for $10 billion. WhatsApp sells for 10% of Facebook’s market cap ($20b). Yahoo! selling to Verizon for $4b is considered a failure. Series A rounds alone are $10m today. Etc. etc.

So selling for even $100m isn’t considered a success, at least, not by the folks that have sold for more. Yes, it’s incredible and will change your life. But — there are 180+ Unicorns today. You can’t really be close to the elite if you’re not in the Top 180.

The Complete List of Unicorn Companies

So … try to live by your own code. And judge yourself. Or you’ll be full of ennui almost no matter what. Founders are full of ennui. The closer you are to the heart of Silicon Valley — the more ennui.

View original question on quora

Published on December 22, 2016
  • 20th Century style VCs sadly have to choose either to suffer the curse of failure to invest wisely or the curse of the “Midas touch” that warps them and everything they touch. Power corrupts and silicon valley has, with some notable exceptions, allowed itself to become slave to instant massive money-centric gratification.

  • Success is relative…a self-funded founder may be happier with a $10M exit than David Duffield was with a $10B sale to Oracle (yes it was hostile, and yes every person has his own goals and aspirations in life…that’s exactly why it’s relative).
    I wouldn’t decline a $10M exit just because some folks in Silicon Valley may think it’s a failure. If I weighted all the options and decided to sell then the assumed opinion of those folks probably won’t be one of my main considerations.
    Besides, a $10M exit may turn out to be a very good choice, for example in case of an acquihire where you receive an impactful role in a hot/well-known company that will provide you with the resources to scale the product much faster or work on your “dream project” at a scale.

Share This