What the facts say about Berlin’s “pressure” to have exits

I’ll make it short: Berlin’s ecosystem has raised enough money both in total and on average / median to produce large companies that should result in outsized exits. However Berlin’s most advanced companies are on average a lot younger than their peers in other ecosystems and – more importantly – much younger than the time-to-exit of previous large European exits.

Berlin has the money, but not yet the time.

So really, if you look at the facts, there doesn’t seem to be much support for desperately needed short term exits. In fact I think that would be a really bad idea – considering how much value creation lies ahead.

Check out our (co-authored with Jade Readguest post on TechCrunch – or if you have less time – a shorter slideshare version:

  • http://twitter.com/write2gether write2gether (@write2gether)

    Just wondering … Berlin’s advanced startups have a median age of 3.5% (& average not much more!) … but have already inhaled almost as much money as swedish startups which are almost twice as long working on their plans and probably closer to sufficient revenues and an exit… so Berlin’s startups have to live something like 7 to 9 years on what they have already raised? Does this mean they would rather tight up their belts for to survive the many years they still have to survive? Or otherwise to grow revenues faster?

    • http://www.berlinvc.com berlinvc

      Interesting observation. Stockholm’s sample set was a little smaller so conclusions are harder. But no I don’t think that the Berlin startups will need to stretch; knowing most of them I think they will need another round or two before being exit ready – but they seem to be on track for raising those rounds.

  • http://twitter.com/djoisfranklin Djois Sronipah (@djoisfranklin)

    As Ciaran confirmed in a comment to his TechCrunch post, the real question “Is Berlin under pressure for the Big One?” and the answer is “Ja!” , but so are VCs and sratups from other startup hubs in Europe. Ask their LPs. VC funded Unicorn-type exits of 500M/1B are rare. I have briefly looked at the US data from ThompsonOne, CBinsight and Mattermark and have a hard time to direct correlate just startup age with Unicorn exits. It stretched from 18 (Instagram) month to 8+ years (IPO age) and more. M&As are faster, IPOs are longer. Und? We knew that. On Funding – the data from US show that European “big startups” are still undercapitalized. Looks like all big-ass exits are at least $100m+ in funding. Why limit the comparison by only two axis: age and funding size? (hint lets combine them in one chart)
    Can we really ignore each startup vertical industry specifics? (market size, number of deep-pocket acquirers) OR market appetite (ww brand recognition, market fundamentals and sentiments). Nah…Don’t think so. Tough one for Berlin with cooling IPO market (See this quarter King Digital) and M&A activity mostly going to the early stage possible (see Google, Yahoo buys in Europe). Food for thought?