Episode Details

What Are the Odds? Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Early-stage investments require follow-on funding to reach a substantial size, providing a return to the investors that justifies the risk. Here are the odds that a startup will raise its next round of funding. After the first round, about half go on to raise a second round. This is not unusual, as many investors divide their investment allocation in half for the first investment. Of the original funded companies, about 30% will go on to raise a third round. This is equivalent to a Series A round. Of the original funded companies, about 15% will go on to raise a fourth round. This is equivalent to a Series B round. Of the original funded companies, about 9% will go on to raise a fifth round. This is equivalent to a Series C round. Of the original funded companies, about 3% will go on to raise a sixth round. This is equivalent to a Series D round. After the first round, there is a halving effect in which approximately half the companies are able to raise another round to move to the next level. Overall, about 70% of the companies will not make a return to their investors due to a lack of an exit. Startup investment is driven by the power law, which provides the majority of the returns through a handful of the investments. Consider these odds when making your investment. Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. Let's go startup something today. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Investors check out: https://tencapital.group/investor-landing/ For Startups check out: https://tencapital.group/company-landing/ For eGuides check out: https://tencapital.group/education/ For upcoming Events, check out https://tencapital.group/events/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound.