When it comes to raising capital for a startup, more is not always better. If you are looking to maximize the return on an exit though, there are a couple of "sweet spots" identified in a new report by Exitround, which bills itself as a "private, anonymous marketplace for buyers and sellers of technology companies from the small to mid-market."
The Exitround Exit Report showed the companies that performed best raised between $2 million to $3 million and between $5 million to $10 million -- with the average exit dropping somewhat after each sweet spot. Those companies in the larger group generated larger average exits than those that raised up to 10 times as much.
The report also suggested that WhatsApp-like rags-to-riches stories don't occur overnight. The companies with the largest exits are at least four years old. Exit prices during the first four years were roughly the same.
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