Billion-dollar venture exits still rare birds

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Need more proof that just a dozen – maybe 15 – private tech companies bring in the bacon each year to the venture business? Just look at last year’s exit data.

Of the 1,824 tech companies that found either M&A or IPO exits in 2013, just 19 had billion-dollar plus valuations. That’s 1% of the total, according to a study released last week by CB Insights.

It suggests that getting into the right deal remains as important as ever.

The study found that a majority of exits with values that were disclosed – 71% – took place for less than $200 million. Slightly more than 44% of the deals went for less than $50 million. One reason is that acqui-hires were on the rise.

What’s more, two-thirds of all tech companies that found their way to an exit had not raised a penny of institutional capital, the study discovered. Of those that did take venture money, about two-thirds exited after seed or Series A rounds.

More proof that the industry’s rewards remain concentrated in a small handful of deals.

Turns out sector interest was cut rather narrowly, too. Internet and mobile-based software transactions accounted for three out of every four deals. Business plans with an exposure to e-commerce and advertising were big motivators.

In other words, being in the right place at the right time is everything.

Photo courtesy of Shutterstock.

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