After watching Lucy pull the soccer from Charlie Brown’s foot on the final doable second time and time once more, we’ve got discovered our lesson and are due to this fact hesitant to imagine that 2024 would be the 12 months of the IPO market’s return. It might or could not occur, however we’re not betting on it.
Different sources of liquidity are due to this fact high of thoughts — there’s a towering pile of personal corporations in want of an exit, or a bailout. Recent research from Cowboy Ventures’ Aileen Lee underscores how shortly illiquid wealth was collected within the personal markets within the final decade, and the way uncommon exits have turn out to be for unicorns and different richly valued startups.
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Lee discovered that the variety of unicorns within the U.S. had elevated 14 instances over the previous 12 months, reaching 532 in 2013 from simply 39 in 2013. Nonetheless, the speed at which unicorns went public moved in the wrong way — solely 7% of unicorns right this moment have discovered an exit, down from 66% of the preliminary cohort. Notice that TechCrunch, like many publications, focuses solely on personal unicorns whereas Cowboy Ventures can also be counting those who have gone public.
This places startups in a tough spot. However the excellent news is that some untraveled and overgrown exit paths have an opportunity of opening up this 12 months. The dangerous information is that these avenues could supply costs far lower than what many startups are keen to just accept. Name it painful value discovery.
Let’s speak personal fairness, startups, and their doable marriage this 12 months.
