I mean, N=3, but I've made decent money on smaller exits.
The relevant metric is not exit price, it's ratio of exit price to pref stack; i.e. raise $40M and sell for $50M, founder is worse than if they raised $2M and sold for $10M.
Economic returns of VC-backed companies follow a power law distribution. This means that the vast majority of the returns for the VC are at the "fat head" of the distribution. The "long tail" does not impact returns, for the VC.
However, for the founder, those returns in the tail can be life-changing. It takes a $5B exit for YC to care. But a $5M exit can be real money for the founder.
So the correct math, from the perspective of the founder, is not "what % are unicorns" but rather "what % sell for more than capital invested" and that number is likely to be closer to 50% than 1%.
Amazing timing - I returned my first ever item to Trader Joe's today, and the experience was memorable.
My wife bought blackberries this morning. Tonight, after dinner, we realized they were moldy. I went to exchange them at about 8:30 pm, just before closing. The store was out of blackberries, though. I called home to ask if there was anything else I should get.
"Olive oil" was the answer. So I walk up to the counter, ready to do an exchange, and the cashier looked at the $8 bottle of Olive Oil, the $3 carton of moldy blackberries, and said:
"Yeah those are about even. Have a good night." He then shooed me out the door without even ringing anything up on the computer.
That kind of autonomy is not what you expect from ANY retail establishment, let alone a grocery store.
The relevant metric is not exit price, it's ratio of exit price to pref stack; i.e. raise $40M and sell for $50M, founder is worse than if they raised $2M and sold for $10M.