What Are The Odds You Get Acquired Within 5 Years for a Good Price? Around 1%-1.5%

So Carta put out some recent data I found very useful on how many startups raise another round, and how many sort of quietly wind down, in the first 5 years or so after being founded (from 2018 to early 2024):

Almost none IPO’d in the first 5 years, but that just makes sense.  It takes at least 8-10 years, on average, to IPO these days.   And half the Seed stage startups had shut down by Year 5.  That sounds about right to me.

But if an IPO is almost impossible in just 5 years, what about an acquisition?

This is where we have some good data, albeit not enough.  About 5% of startups on Carta were acquired in the first 5 years.

What’s less clear is how many were acqui-hires or acquisitions for a very small amount.  I’m going to guess based on my experience that at least two-thirds have a very modest exit.  And only 1/3 of these have an exit for 3x-10x the price of the last round, i.e. enough for anyone to make any money.

So my educated guess from this data:  1%-1.5% of startups have a “good” exit in the first 5 years.

That sounds pretty tough, and I guess it is.  But it also means just plan on going longer.  A number of my best “exits” had no great M&A offer the first 5 years, and a number of others had soft offers that fell apart in the end.

Overall, the latest Carta data also ties to this:

Go long.  If something great comes up first, maybe take it.  And be optimistic, too.  But realize it may be years 6-10+ where you build the real value.  5 is fast in SaaS and B2B.

And in any event, know to get to a $1B+ exit takes on average 11.7 years.

It’s the second 5 years where the real value starts to compound 🙂

More on that data here: