Excellent infographic on “How Startup Funding Works” – a superb visualization created by Infographic Entrepreneur Anna Vital. It shows company valuation from founder/idea stage to an Initial Public Offering (IPO) exit. While the number of exits by IPO is a small percentage of of overall exits these days, mergers and acquisitions of the size represented are not uncommon – in fact most of Silicon Valley’s startup ecosystem is predicated on the “billion dollar exit”. Either way, the notion of an exit – that is, the sale of your company to an acquiring entity is a fundamental concept for all startup entrepreneurs to grasp. Once you’ve received professional investment, either from angel investors or venture capitalists, you have agreed to sell your company at some future point. This is typically referred to as an exit – as the founder you may or may not stay on with the company you’ve created, but as most serial entrepreneurs will tell you they tend to be better at finding an opportunity, creating a company based upon that opportunity and rapidly growing it, than hanging around and managing a large corporation with very different day-to-day issues.
It’s a great visual primer for the budding entrepreneur. My only concern is having your uncle Heisenberg as one of your early investors.