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Research Outline

Prepared for Tomonari | Delivered November 27, 2019

Data on VC Investments

Goals

In order to build content for a pitch deck for a new fund, determine the average returns for VC in the later stages of investments (specifically, series C stage and above), the average time to exit (i.e., sell off the company or launch an IPO), and how companies typically increase in value after their series C funding.

Early Findings

Returns

  • Late stage VC investments usually see a return of at least 10x-30x. This is because they will generally block the sale of any venture until they see these returns.
  • A minimum VC return annually is 20%.

Time to Exit

  • The average venture capital exit time is 8-10 years for VC investors.
  • Based on that average exit time of 8-10 years for series investors, the time to exit for the entrepreneur is about 16 years and for angel investors about 12 years, since series investors invest after the company already has traction.

Value Increase

  • Companies typically raise about $26 million to $55 million in series C funding, and are valued at $100 to $120 million.