Investors Make 600% on the Average Successful Startup

Now we know why investors love startups!

has an interesting report about the success of young companies that eventually prosper: they raise an average of $25.3 million and sell for $196.8 million. For those of you who hate doing math, TechCrunch has already done it for you: the resulting sum would amount of an increase of 676%! Granted, these profits are only entitled to investors who own 100% of the company (according to TechCrunch, investors do not typically own the entire company). If they don't, they have to settle for a portion of the $196.8 million handed over by some conglomerate. According to TechCrunch, the data comes from an analysis of all the exits listed in

, TechCrunch's own directory of technology companies, investors, and people within the tech industry. “Meanwhile, IPO-bound companies generated lower percentage returns, but made a lot more money per exit,” TechCrunch wrote. “The average one raised $580.3 million while private, then went public with a market cap of $2.3 billion on its first day of public trading for 303% profit on investment (yes, investors probably aren't selling all their stock on the first day, this is just one way to measure IPO exits).” TechCrunch said that the analysis was conducted by Alexey Tolkachiov, a Belarus-based engineer. Tolkachiov enlisted in the help of his brother, Anton. Together, the two brothers examined “all CrunchBase-listed companies that had exits over the last five, and are ten years old or younger.” “So, these stats (which you can also find on their data analysis site,

) are squarely focused on the modern startup world,” TechCrunch added. “Exit prices fluctuate over the course of a company's life before it exits — but they don't trend upwards the older the company is, overall. Peak ages seem to be 1.5 years and 7.5 years in, for whatever reason. This data suggests that selling early could save you some time making money.” Hmm. I wonder what

must be

right now?