What stage startup offers the best risk-reward tradeoff? | Prospect Blog

But let’s face it. The reason you’re probably thinking about joining a startup is how much you can earn if it exits. Traditional (and accurate) wisdom says the earlier you go, the more money you’ll make on a successful exit—and the more likely you’ll end up with nothing. The later you go, the smaller your eventual check—but the higher the odds the startup actually does exit. So what’s the optimal trade-off between risk and reward? To answer that question, we took a close look at 14,000 U.S.-based startups that raised in 2014 or 2015. We picked those years because enough time has passed that most of these startups have had ample time to exit. ‘Exit’ is defined here as an IPO or acquisition where the startup exited for more money than it raised. It’s no surprise that the more rounds of funding a startup raises, the more likely it is to exit. 19% of startups that raise a Series A round ultimately exit for more than the amount they raised, compared to 40% of companies that make it to Serie

But let’s face it. The reason you’re probably thinking about joining a startup is how much you can earn if it exits. Traditional (and accurate) wisdom says the earlier you go, the more money you’ll make on a successful exit—and the more likely you’ll end up with nothing. The later you go, the smaller your eventual check—but the higher the odds the startup actually does exit. So what’s the optimal trade-off between risk and reward? To answer that question, we took a close look at 14,000 U.S.-based startups that raised in 2014 or 2015. We picked those years because enough time has passed that mo