Tech co’s need 4 to 5 rounds to exit
How many rounds has it historically taken tech companies to go public? Based on the data from 150 IPO’s, the answer varies depending on industry. The data and observations are below.
On median, publicly traded software companies raised through their Series D before going public. On median, software companies take 10 years to exit.
Social media companies on median didn’t exit until after their Series F. Linkedin was the quickest of the group going only to the Series D.
Ad based businesses went through 5 rounds. They took 8 years to exit on median. Netscape which was founded and ultimately IPO’d in 1994, is a great reminder of how crazy the dotcom boom was.
Subscription and E-commerce exited after the Series C. Subscription took 7 years to exit on median and e-commerce took 6.
The data does not show whether there were multiple occurrences of the same round (for instance B, B1, B2) or bridge rounds — both are unlikely since these companies all were successful enough to go public. The data does seem to show that some of the more recent IPO’s in the tech space took much longer to exit and many more rounds as companies are staying private longer. Also notice businesses that are B2C focused scale much faster than those that are B2B or enterprise focused, so they exit sooner.
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