In the world of startups, the end goal is often one of two things: going public through an IPO or being acquired. But which is more likely to happen, and what does that depend on? The answer lies in the sector a startup operates in. Here, we’ll break down real data to explore how startups exit — whether through IPOs or acquisitions — across different industries.
1. 80% of tech startups exit via acquisition, only 20% via IPO
The fast pace of tech means faster exits
In the tech world, speed is everything. Technology evolves fast, and user expectations change even faster. Companies that can’t keep up often look to acquisitions to fill in their innovation gaps. That’s why so many startups in this space find themselves acquired instead of going public.
Getting acquired makes sense for a lot of founders and investors. IPOs are expensive and complex. There are legal hurdles, regulatory scrutiny, and the challenge of quarterly reporting. Not every startup is ready—or willing—to take that on.
An acquisition, on the other hand, can happen quickly. It often brings cash, stock, and new opportunities for the founding team. The acquiring company might offer distribution channels, brand recognition, and operational muscle that takes the product to new heights.
How to prepare your tech startup for acquisition
If you’re building in tech, chances are high that acquisition will be your exit route. So, plan for it. That means keeping your financials clean and easy to audit. It means making your codebase maintainable and well-documented. It also means nurturing partnerships with potential acquirers long before any offer comes in.
But above all, focus on value creation. Build something that users love and that solves a real problem. When your product has traction and loyalty, bigger players will take notice.
Think of your startup like a puzzle piece. The more it fits into a larger company’s product roadmap, the better your chances of a solid exit.
2. Biotech startups have a 50% IPO rate, much higher than other sectors
Why biotech loves the public markets
Biotech is one of the few sectors where IPOs are not only common—they’re almost expected. That’s because the economics of biotech are different. These companies often spend years developing a product with no revenue in sight.
Private capital can only take them so far. At some point, they need the public markets to fuel the next stage.
Also, going public in biotech can happen earlier in the company’s lifecycle than in tech. Investors in this space understand the risk and are willing to bet on promising science, even before it’s commercialized. That’s why we see a high IPO rate in biotech—about 50%.
What biotech founders should focus on
If you’re in biotech, you’re probably thinking about an IPO from the beginning. But make sure it’s the right move for you. While public money can fund clinical trials and expansion, it also brings pressure. Investors want updates. Regulators want transparency. It’s not for the faint of heart.
Start by building a strong scientific foundation. That means validated trials, published results, and experienced advisors.
Then, think about investor relations. You’ll need to convince not just VCs, but also the analysts and institutions that follow public companies.
It’s also smart to time your IPO carefully. Biotech markets are cyclical. If public sentiment is low—say, due to high-profile drug failures—your IPO might struggle, even if your science is solid.
Lastly, build optionality. Don’t rely only on going public. Strategic partnerships, licensing deals, or even acquisition by big pharma can be just as lucrative, and sometimes more manageable.
3. Enterprise SaaS startups are 3x more likely to be acquired than go public
Why B2B SaaS attracts buyers
Enterprise SaaS startups often build niche, specialized tools that fit perfectly into larger platforms. Whether it’s workflow automation, security, or data analytics, these startups usually solve one narrow problem very well. And that makes them prime targets for acquisition.
Larger companies love to snap up these tools and plug them into their broader offering. It’s faster than building from scratch, and it gives them a competitive edge in the market.
Plus, the predictable revenue model of SaaS makes valuation easier. When acquirers see strong MRR or ARR with low churn, their interest goes up fast.
How founders can shape a SaaS startup for a strategic sale
If you’re building a SaaS company, acquisition is very likely in your future. That’s not a bad thing—it can be a huge win if you prepare properly.
Start by tightening your sales and onboarding process. Acquirers want systems that scale. The less manual intervention needed to get customers signed up and using your product, the better.
Next, optimize your pricing model. Are you charging in a way that reflects the value you deliver? Are your plans clear and easy to explain? These things matter when someone is evaluating your business from the outside.
Another key move: build integrations. If your tool works smoothly with other popular enterprise software, your attractiveness increases. It shows you understand your ecosystem and it gives potential buyers more confidence.
Lastly, build long-term contracts and focus on reducing churn. Acquirers want to buy stability. If your users stick around and pay more over time, you’re in a great position for a high-value exit.
4. Average acquisition price for fintech startups: $120M; average IPO valuation: $1.5B
Why fintech valuations vary by exit type
In fintech, there’s a wide gap between acquisition and IPO valuations. The average acquisition lands around $120 million, while IPOs often fetch valuations over $1.5 billion. That’s more than a tenfold difference.
So what’s going on here?
It all comes down to scale and regulatory approval. A fintech company aiming to go public needs to operate across multiple markets, manage high compliance standards, and maintain massive user bases.
This kind of infrastructure takes years—and millions—to build. By the time a company is ready for an IPO, it’s typically a giant.
On the other hand, many promising fintech startups get acquired much earlier. Large banks or financial platforms often buy these companies to improve their digital offerings.
The acquirers don’t need the startup to be huge—they just want its tech, team, or user growth.
How to decide between scaling for IPO or preparing for M&A
If you’re running a fintech startup, you’ll need to be clear about your end goal early on. Are you solving a niche problem that a larger player might want to acquire quickly? Or are you building a full-stack financial product that could one day stand on its own as a public company?
If you’re aiming for an acquisition, focus on partnerships and API integrations. Make it easy for banks or financial platforms to plug your solution into theirs. Build strong usage metrics, even if your revenue is still modest.
Often, engagement and user behavior data can be more valuable than income in early-stage fintech.
On the other hand, if you’re planning for an IPO, you’re in it for the long haul. You’ll need full licensing and compliance in key regions.
Start early with regulatory navigation. You’ll also need to build investor relations, especially with institutions that understand fintech. Think of your IPO as a political campaign—you need to build support before you ever go to market.
And regardless of your path, make sure your cap table doesn’t get messy. Having too many early investors or complex rights can complicate both M&A and IPO scenarios.
5. Healthtech startups achieve IPOs at a 15% rate; acquisitions at 60%
Why most healthtech companies get acquired
Healthtech startups, like those building patient management platforms, wearable diagnostics, or digital therapy apps, rarely go public. Only around 15% make it to an IPO. On the flip side, a solid 60% get acquired.
This makes sense if you look at the landscape. The health sector is heavily regulated and fragmented. Going public means proving your solution can scale safely, comply with various health laws, and handle patient data across jurisdictions. That’s a steep climb.
But established health companies—like insurers, hospitals, and pharmaceutical firms—are always on the lookout for innovation. Acquiring a nimble startup lets them offer better services without building tech from scratch. And that creates an M&A-friendly environment.
Making your healthtech startup appealing to acquirers
If you’re building in healthtech, acquisition is probably your most likely exit. So how do you prepare?
First, compliance is key. Even if you’re not ready to scale nationwide, show that your systems meet HIPAA or other relevant standards. That builds trust. Acquirers need to know your product won’t become a legal liability.
Second, track user outcomes. In healthtech, what matters most is whether patients or providers actually benefit. Use real-world data to back up your claims. Whether it’s reduced wait times, better patient adherence, or lower costs, document everything.
You should also consider partnerships. Integrate your software with electronic health records (EHR) systems or provider platforms. This shows that your product fits into the existing workflow and reduces friction—something acquirers value highly.
And remember, brand trust matters. If doctors or hospital systems already rely on you, your brand equity can significantly increase your valuation. Build those relationships early.
If you’re one of the few going public, be ready to share long-term clinical data. You’ll also need strong advisory boards, including recognized names in healthcare. They boost your credibility with public market investors.
6. Cleantech startups see 70% of exits through M&A and only 10% via IPO
Why cleantech often gets bought, not listed
Cleantech is a tough space for IPOs. The technology is capital-intensive. There are long development cycles, heavy infrastructure needs, and often a wait of years before revenue kicks in. As a result, most cleantech startups—about 70%—exit via acquisition. Just 10% make it to an IPO.
Energy giants, utility firms, and industrial companies are hungry for innovation in sustainability. But rather than developing their own solutions, they often choose to acquire startups that already have working technology and pilot results.
These acquisitions help corporations meet environmental targets, lower their carbon footprint, and improve energy efficiency—all without reinventing the wheel.
What cleantech founders should do differently
If you’re in the cleantech space, recognize early that your most likely buyer is an established energy or infrastructure company. These firms think in terms of decades, not quarters. They value reliability, durability, and proof-of-concept far more than branding or speed.
Focus your efforts on product validation. Demonstrate your technology in real-world environments. Get certifications where possible. And document your energy savings or environmental impact thoroughly.
You should also start building relationships with your potential acquirers years in advance. Go to the same conferences, speak at the same panels, and join the same trade groups. Make sure they know who you are before you’re looking to exit.
If you’re one of the few aiming for IPO, understand that you’ll need a huge capital runway. Investors will expect contracts, pilots, and manufacturing infrastructure already in place. Public market appetite for cleantech comes and goes—so be prepared to weather down cycles.
Ultimately, in cleantech, traction and proof often matter more than speed. So slow down if needed, get your technology right, and position yourself as a key part of someone else’s long-term energy transition plan.
7. B2B software startups: 25% IPO exit rate; 65% acquisition rate
Why B2B software finds a balanced exit path
B2B software is one of the few sectors where both IPOs and acquisitions are common. Around 25% of startups in this space eventually go public, while about 65% get acquired. This dual outcome is largely because B2B software has clear revenue models, high margins, and predictable growth when done right.
Unlike consumer apps, B2B software businesses sell to companies. That means longer sales cycles, but also higher retention and better unit economics. If a product becomes deeply embedded in enterprise operations, it’s tough to replace—and that creates real value for both public markets and buyers.
Startups in this category are also easier to evaluate. Investors and acquirers alike can look at metrics like MRR, CAC, LTV, churn, and expansion revenue to make informed decisions.
How to choose the right path for your B2B startup
If you’re building a B2B software company, you’ll want to start by clarifying your exit goals early. Do you want the long-term grind of managing a public company? Or are you more interested in building something strategic and selling it to a major player?
If you’re IPO-bound, invest in long-term growth strategies. That means expanding your sales org, going multi-vertical, and locking in annual contracts. Build systems that scale. You’ll also want to maintain a strong relationship with analysts, hire an experienced CFO early, and regularly audit your financials.
On the flip side, if an acquisition is your preferred outcome, focus on strategic alignment. Who are the big players in your space? What gaps do they have that your product fills? Tailor your product roadmap to complement—not compete—with their offerings.
Also, take care with your pricing model. Buyers love predictable, subscription-based revenue. It’s better to have 500 customers paying reliably each month than 10 massive clients who might churn next year.
Whether you IPO or exit through M&A, don’t overlook your customer success strategy. Happy users create solid case studies and testimonials that make you more valuable to any future stakeholder.
8. Hardware startups: 85% of exits are acquisitions
Why hardware rarely reaches the public markets
Building hardware is expensive. There’s manufacturing, logistics, quality control, and a host of physical challenges that software just doesn’t face. That’s why only a small percentage of hardware startups go public. In fact, 85% of them end up getting acquired instead.
There’s also the issue of scalability. A hardware company can’t just deploy an update over the air. Every change means retooling and shipping. Investors and public markets don’t love that. But established players in sectors like electronics, defense, and consumer tech do—they see value in proven, working prototypes that fill gaps in their product line.
These acquirers often have global distribution systems, manufacturing capacity, and brand strength. Your device might be great, but without their infrastructure, it may never scale.
Making your hardware startup attractive for acquisition
If you’re building hardware, you need to be realistic. IPOs are rare, so your focus should be on de-risking the business and making your product as plug-and-play as possible for acquirers.
Start with reliability. You need to show that your hardware works consistently across various environments and use cases. Acquirers want to know your tech won’t fail under pressure—or at scale.
Next, document everything. Manufacturing specs, materials sourcing, compliance certifications—all of it matters. A larger company might want to replicate your process, so make sure it’s clear and organized.
Customer validation is also huge. If businesses or consumers are using your product and loving it, that’s a green flag. Even small pilots with large companies can dramatically boost your acquisition prospects.
One last tip—don’t forget about your IP. Strong patents and defensible technology are a must. Acquirers often want the tech more than the team or brand. The better your IP position, the higher your exit value.
9. Consumer apps have a 90% acquisition exit rate
Why most consumer apps don’t IPO
Consumer apps live and die by user engagement. They grow fast or they disappear. Very few have steady, predictable revenue, and even fewer have strong long-term retention. That’s why nearly 90% of consumer app exits are acquisitions rather than IPOs.
Going public as a consumer app requires massive scale—think hundreds of millions of users. And even then, the market can be skeptical. Revenue models need to be rock solid, user data must be airtight, and any growth slowdowns are punished harshly.
For most consumer app founders, an acquisition is a more realistic and rewarding goal. Social media giants, ecommerce platforms, and entertainment companies are always on the lookout for apps that capture attention or create new experiences.
How to position your consumer app for a lucrative acquisition
If you’re in the consumer space, your number one job is growth. Not just user growth, but engaged, sticky users. It’s better to have 5 million highly active users than 50 million who rarely open the app.
You should also think deeply about data. What are you collecting? How is it being used? Make sure your data policies are clean, clear, and compliant. Acquirers need to know they won’t face regulatory risk if they buy you.
Brand also matters more here than in other sectors. If people recognize your app and talk about it, your valuation goes up. Invest in community-building, viral loops, and strong user support.
Another key strategy is to show platform potential. Can your app expand into payments, commerce, or social networking? The more possibilities you offer, the more a buyer can do with your product after the acquisition.
Finally, understand timing. In consumer tech, interest can spike and drop quickly. Be ready to sell when the right opportunity comes along—even if you’re not “ready.” Waiting too long can mean missing your window.
10. IPO timelines are 2x longer than acquisition timelines (7 years vs 3.5 years on average)
Why IPOs take longer than acquisitions
Taking a company public is a marathon, not a sprint. The average timeline to IPO for startups is about 7 years. Compare that with acquisitions, which often happen around the 3.5-year mark, and you’ll see why most founders prefer the faster exit route.
The main reason for the longer IPO runway is preparation. To go public, a company needs strong, auditable financials, long-term growth metrics, and a scalable operation. It also needs a full leadership team, a board with governance experience, and well-oiled legal and accounting systems.
Acquisitions, on the other hand, can happen more opportunistically. A big company might see a startup doing well in its space and make an offer quickly. If both sides agree on valuation and strategy, the deal can close in a matter of months.
How to decide whether to pace for IPO or position for a quick sale
If you’re planning for an IPO, you need to be patient—and methodical. Every part of your company needs to be investor-ready. That means putting systems in place to track metrics cleanly, run audits annually, and manage reporting with precision.
You’ll also need to expand your team to include investor relations, legal, and regulatory support. All of this takes time and money. So prepare your investors and employees for a longer ride.
On the other hand, if you’re leaning toward acquisition, start by building visibility in your ecosystem. Network with potential acquirers, speak at events, and get your brand in front of the right people. The more strategic you appear, the more likely you’ll be approached.
Also, stay nimble. Companies that get acquired quickly often keep their operations lean, iterate fast, and stay laser-focused on product-market fit. Avoid overbuilding unless it aligns with long-term scalability.
Ultimately, your business model should guide your timeline. Recurring revenue, growing margins, and operational discipline are non-negotiable for an IPO. For an acquisition, what matters most is your fit with someone else’s long-term strategy.
11. Media startups go public only 5% of the time; 75% end in M&A
Why media is rarely IPO-ready
Media is one of the toughest sectors for IPOs. The revenue is unpredictable, the margins are tight, and competition is fierce. That’s why just 5% of media startups go public. On the other hand, about 75% are acquired—often by larger media conglomerates or tech platforms looking to add content, audiences, or capabilities.
Public markets don’t love businesses that depend heavily on advertising revenue. Ad budgets fluctuate. Algorithms change. Even small shifts in platform policies can cause big revenue swings for a media startup.
This instability makes acquisitions the safer bet. A media brand with a loyal following, a strong editorial voice, or a niche community can be very valuable to a larger player looking to grow its influence or diversify its audience.
What media startups should focus on for acquisition success
If you’re in the media game, you should be thinking about brand and distribution first. Who are you reaching? Why do they care? And how loyal are they?
The strength of your audience is your biggest asset. Acquirers want engaged communities, not just pageviews. So build email lists, grow social channels, and foster real interaction. A newsletter with 100,000 dedicated readers is worth more than a website with 10 million monthly hits if those readers actually engage.
Second, build multiple revenue streams. Ads alone won’t cut it. Try memberships, events, courses, or affiliate sales. When you show revenue diversity, you de-risk your business and make it more appealing to buyers.
Partnerships also matter. Syndicate your content with bigger outlets. Get your stories picked up by aggregators. The more reach you have, the more valuable you become.
If you’re one of the rare media companies thinking IPO, understand that you’ll need years of financial growth and a clearly differentiated brand. Think of companies like The New York Times or BuzzFeed—these are exceptions, not the rule. And even they face public scrutiny on every earnings call.
So if you’re building a media startup, know that acquisition is likely your finish line. Build something with purpose, grow your influence, and keep your operations light so you’re always ready to move.
12. IPO valuations are 5–10x higher than acquisition values in AI/ML startups
Why public markets prize AI/ML at scale
Artificial Intelligence and Machine Learning startups are some of the hottest companies in tech today. The promise of automation, predictive analytics, and scalable intelligence is drawing massive investor interest.
But here’s the catch—while acquisitions happen often, the IPO valuations are usually 5 to 10 times higher. This means that if a startup can hold out and scale independently, the public markets are willing to pay a serious premium.
That’s because investors believe in the long-term potential of AI. They see it transforming industries from healthcare to logistics to entertainment. If your AI startup can show real product-market fit, scalable infrastructure, and defensible data, it can command sky-high public valuations.
When to sell your AI company—and when to wait for an IPO
So what do you do if you’re building in AI?
First, assess your technology honestly. Is your model proprietary? Is it easily replicated? Are you using unique, high-quality data to train it? If your tech isn’t defensible, you may want to consider selling sooner rather than later.
But if your IP is strong, your algorithms are unique, and your infrastructure is scalable, then waiting for an IPO might make sense. You’ll need to show consistent growth, expand into multiple sectors, and build a brand around trust and transparency—especially in how your algorithms work.
Another big factor is cost. AI models, especially those with large datasets or real-time processing, are expensive to run. Acquirers may help foot the bill—but going public gives you the war chest to keep building without giving up control.
You also need to consider talent. The best AI engineers are expensive and in high demand. If you go public, you’ll need to maintain a compelling culture and offer packages that compete with Big Tech. But you also get the spotlight, and that can help with hiring.
In short, acquisitions can be quick and cash-rich, but IPOs offer the kind of long-term upside that turns founders into billionaires. Your decision depends on your runway, your ambition, and your product’s defensibility.
13. 95% of cybersecurity startup exits are via acquisition
Why cybersecurity gets acquired, not listed
Cybersecurity is one of the most acquisition-heavy sectors in tech. About 95% of cybersecurity startups exit through acquisition. That’s a staggering number, and it’s not a coincidence.
Big companies simply don’t have time to build in-house defenses for every new type of threat. The attack surface is growing faster than internal teams can handle. So when a startup invents a smart, effective tool for prevention or detection, it often gets snapped up quickly.
Also, many cybersecurity startups focus on solving one very specific problem—like endpoint protection, identity management, or threat intelligence. These solutions are valuable but often too niche to sustain a standalone public company. Larger players, like Palo Alto Networks or Cisco, see them as essential puzzle pieces and buy them to fill gaps.
How to position your cybersecurity startup for a strong exit
If you’re building in this space, acquisition is the default, so optimize for it. Focus your energy on building defensible, high-impact technology that integrates well into existing IT ecosystems.
Start with user trust. Your product needs to work every time, with no room for failure. Even small bugs or data leaks can destroy your credibility.
Next, document use cases clearly. Acquirers want to know who your solution is built for and how it performs in the real world. If you’re protecting remote workers, show how your system holds up under scale. If you’re focused on zero-trust environments, highlight the pain points you eliminate.
Make it easy to plug your product into others. Use standard protocols and support integrations with the tools your target buyers already use—like Microsoft Active Directory, AWS security services, or Okta.
Also, understand the acquisition landscape. Cybersecurity buyers tend to fall into three buckets: platform providers who want to add new features, cloud infrastructure giants who need security baked into their systems, and global integrators who serve enterprise clients.
Keep your financials clean, your IP protected, and your team focused. Acquirers love small, smart teams that can be quickly folded into larger R&D groups.
14. E-commerce startups reach IPO in less than 8% of cases
Why going public is rare for e-commerce
Running an e-commerce startup might seem like a direct line to riches. But the reality is sobering—less than 8% of e-commerce companies ever go public.
That’s because margins are slim, competition is brutal, and customer acquisition costs can spiral out of control. Public investors want predictability, and in e-commerce, that’s hard to promise.
Shipping delays, return rates, ad platform changes, and shifting consumer habits all create volatility. That’s why most e-commerce startups either stay private, merge, or get acquired by platforms or private equity firms.
Going public as a direct-to-consumer brand is even harder. You need massive brand equity, a loyal customer base, and solid supply chains to convince investors you’re not the next one-hit wonder.
Making your e-commerce startup acquisition-ready
If you’re building an e-commerce company, start by tightening operations. Smooth logistics, fast delivery, and excellent customer service matter more than flashy branding. Acquirers want efficiency.
Also, diversify your traffic. Don’t depend entirely on Facebook or Google ads. Build email lists, work with influencers, and test new channels like TikTok or YouTube Shorts. Multiple sources of traffic reduce risk.
Product quality is another differentiator. If you have strong reviews, high repeat purchase rates, and low return rates, you become far more attractive to buyers.
Brand matters too—but not in the way you might think. It’s not just about design or storytelling; it’s about customer connection. Are people talking about your product organically? Are they recommending it? These signals raise your acquisition value.
And don’t forget financial clarity. Keep a tight grip on inventory, track gross margins closely, and manage burn rate. A lean, disciplined company with healthy unit economics is far more likely to attract buyers—or even, in rare cases, reach IPO readiness.
15. Biotech IPOs raise 2.5x more capital than acquisitions in the same sector
Why biotech IPOs attract more funding
Biotech is one of the only sectors where IPOs consistently raise significantly more money than acquisitions—2.5 times more, on average.
That’s because the biotech market is built around future potential. Investors are often betting not on today’s revenues, but on tomorrow’s drug approvals, licensing deals, or clinical breakthroughs. Public markets are more willing to fund high-risk, long-term biotech projects than acquirers, who typically want a more mature product.
Going public allows a biotech company to tap into this appetite for potential. Institutional investors and hedge funds looking for the next big therapeutic solution are willing to buy in even before commercialization, as long as the science is sound and the team is credible.
How biotech startups can prepare for IPO-scale funding
If you’re in biotech and thinking long-term, you should understand what going public really means for your company.
First, be prepared to sell your story. Biotech investors want a narrative—what unmet need are you solving, how is your approach different, and what’s the roadmap to regulatory approval? Clinical trial design, peer-reviewed studies, and expert advisory boards all help you tell that story credibly.
You’ll also need a robust regulatory strategy. Even if you’re still in early-stage trials, investors will expect you to show a clear plan for navigating the FDA or EMA. Regulatory delays are common, so be honest in your projections and show buffers for risk.
Build your leadership team with IPO experience. You’ll need a CEO and CFO who understand investor relations, public market expectations, and the nuances of biotech communication.
Lastly, stay lean with your operations but ambitious with your pipeline. If you have multiple promising therapies in development, even if only one is close to trial completion, that diversity can boost your valuation. Investors love options.
And remember, raising money is only the beginning. Post-IPO, you’ll need to continue hitting milestones and communicating progress clearly. That’s how you keep investor confidence high and attract follow-on funding.
16. Edtech startups: only 6% reach IPOs; 68% acquired
Why most edtech companies get acquired instead of going public
Edtech may be booming in certain markets, but the odds of taking an edtech startup public are slim—just 6% make it to IPO. Meanwhile, a significant 68% end up getting acquired.
This imbalance is due to a few major reasons. First, the education market is highly fragmented. Every school district, university, and learning organization operates with different needs, rules, and budgets. That makes it hard for edtech companies to scale uniformly.
Second, revenue tends to be slow and seasonal. Budgets are often locked in advance, decisions take a long time, and procurement cycles can be painful. That doesn’t sit well with public investors who want steady, rapid growth.
On the flip side, big publishers and tech platforms are always looking to acquire new learning tools, assessment systems, or content delivery methods. They have the distribution power and institutional relationships to scale what small startups create.
Building an edtech company that acquirers want
If you’re creating an edtech startup, the odds suggest you should plan for acquisition. So, build like a specialist—not a generalist.
Start with a well-defined user. Are you building for K-12, higher ed, corporate training, or adult learning? The narrower your target, the easier it is to build something truly valuable and differentiated.
Next, prove efficacy. In education, results matter. Whether it’s higher test scores, improved engagement, or faster learning outcomes, you must be able to measure and share the impact your product makes.
Also, make friends with standards. Integrate with popular platforms like Google Classroom, Canvas, or Moodle. The more your tool fits into existing workflows, the more appealing it becomes.
If you’re aiming for a buyer like Pearson, Scholastic, or Coursera, track what they’re acquiring. Many of these players look for startups that expand their digital offerings or fill gaps in their tech stack. Watch their product moves closely and align your own roadmap.
Finally, keep your tech scalable. Education demand can spike fast—especially during back-to-school seasons or curriculum overhauls. Be ready to handle that growth, and make sure your architecture supports it.
And if you’re one of the few pushing toward IPO? Know that you’ll need a very large, loyal customer base—likely across multiple education verticals—and a product that’s baked into learning delivery for millions.
17. Marketplace startups: 80% M&A rate; 10% IPO rate
Why most marketplaces are bought, not listed
Marketplace businesses connect buyers and sellers. From rideshare platforms to freelance hubs and online grocery delivery, these startups are everywhere. But they rarely go public. Only 10% of them IPO, while 80% are acquired.
The reason is rooted in complexity. Marketplaces have to balance two sides—supply and demand—at the same time. It’s a constant juggling act. If one side grows too fast or too slow, the entire platform can falter.
Even when they succeed, marketplaces often run on razor-thin margins, especially if logistics or customer service are involved. Public investors don’t like unpredictability or costly operations. But acquirers—especially other platforms—see them as ways to consolidate users or expand into new geographies.
A larger platform can fold a smaller one into its system and immediately benefit from shared infrastructure and brand power.
How to build a marketplace that gets acquired
If you’re building a marketplace, acquisition is the likely path—so think about who your ideal buyer might be. Is it a larger marketplace in your category? A tech company looking to enter your space? Or maybe a logistics or payment provider?
Start by solving a niche problem well. Marketplaces that succeed often begin in a narrow vertical—say, vintage clothing or B2B contractors—and dominate it before expanding. Specialization builds trust and liquidity.
Focus on user experience. Make it seamless for both buyers and sellers. If your platform is frustrating or inconsistent, it will struggle to scale—and buyers will hesitate.
Data is also critical. Marketplace acquirers care deeply about usage patterns, repeat rates, transaction volume, and churn. You need to track all of these and be able to present them in a clean, compelling format.
Next, address trust and safety. Build policies, moderation tools, and insurance systems if needed. These are the hard things most platforms skip—and exactly the things acquirers will value.
Lastly, consider partnerships early. Integrate with shipping providers, payment processors, and CRM platforms. If your marketplace fits into a larger supply chain or customer journey, you’re a more logical acquisition target.
IPO-level scale requires massive volume and very efficient operations. But acquisition-level success is achievable with loyal users, defensible tech, and smart positioning.
18. Martech startups: 85% acquired before Series D
Why most martech exits happen early
Marketing technology—or martech—is one of the most acquisition-heavy spaces in SaaS. A staggering 85% of martech startups get acquired before even reaching Series D.
This happens because large companies—especially enterprise platforms and CRM providers—need to stay ahead in a crowded, fast-moving landscape. Martech evolves fast, with new tools for personalization, analytics, attribution, and campaign automation emerging every year.
Rather than build their own tools, established players like Salesforce, HubSpot, or Adobe often buy startups to expand their feature set. This lets them move faster and stay competitive.
Early-stage martech companies with promising traction and unique features become prime acquisition targets. The result? Most get scooped up before they need late-stage funding.
How to attract early acquisition interest in martech
If you’re building a martech startup, focus on solving one high-impact problem that large platforms aren’t addressing well.
Maybe that’s better attribution for offline conversions. Or smarter lead scoring. Or predictive campaign suggestions. Whatever it is, it should be narrow but meaningful—and something that can be bundled into a larger platform.
Design with integration in mind. Use APIs that make it easy to connect with Salesforce, HubSpot, Shopify, or Google Ads. Acquirers want tools that plug in, not ones they have to rebuild.
Track results obsessively. Marketers live and die by data. Show that your tool improves ROI, increases conversion rates, or reduces churn. And show it with clear, compelling metrics.
Speed matters too. If you can show fast time-to-value—meaning customers see results within days or weeks—you’ve got a much stronger case.
Also, don’t try to build a full stack too early. It’s tempting to become the “one-stop-shop,” but that often dilutes your value proposition. Instead, dominate your niche, and position yourself as a must-have add-on for bigger players.
If the market is responding well, but you haven’t yet raised a big round—congratulations. You may already be in the sweet spot for a strong early acquisition.
19. IPO survival rate after 5 years: 60%; acquisition survival: 45%
Why IPOs may offer better long-term survivability
After five years, about 60% of startups that went public are still operating independently.
In contrast, only 45% of acquired startups remain intact and operational. The difference in survival rates is small but significant—and it highlights the trade-off between control and consolidation.
An IPO gives a company capital, publicity, and more independence. It also imposes structure—quarterly reporting, shareholder accountability, and public scrutiny. This pressure can actually help some companies stay focused, make better decisions, and keep pushing forward.
On the flip side, acquisitions come with integration challenges. Sometimes, the acquiring company folds the startup into its operations and the original brand disappears. Other times, innovation slows down, key people leave, and product direction changes.
While the exit might be financially rewarding, the startup’s original mission can get lost in the process.
Planning for survival post-exit
If you care about the legacy and longevity of your company, your exit strategy should reflect that.
If you’re eyeing an IPO, you’ll need to build systems that can scale under public pressure. That means resilient leadership, clear product vision, and a culture that adapts to change. Also, consider long-term investor relationships. Choose partners who understand your industry and share your commitment to building over decades—not just flipping a profit.
If you’re headed for acquisition, ask hard questions during the process. What happens to your team? Will your product remain independent? How will your roadmap change?
Negotiate thoughtfully. Some founders ask for autonomy agreements—like keeping their brand separate or continuing to lead the product team. These terms can make a big difference in whether your startup continues thriving or disappears into a product suite.
Also, think about your customers. If you’re being acquired, how will their experience change? Are you improving their outcomes or risking disruption? Your users are your best advocates—protecting them protects your reputation.
In both exit paths, survival depends on alignment. If you stay true to your company’s mission and values—whether as a public company or part of a larger entity—you’ll have a better shot at staying relevant and impactful.
20. Blockchain startups: IPOs account for less than 3% of exits
Why blockchain rarely goes public
Blockchain startups, despite being one of the most buzzed-about segments in tech, almost never go public through traditional IPOs. Less than 3% of them take that route. Instead, they rely on acquisitions, token sales, or remain decentralized and private.
The biggest reason is regulatory uncertainty. Many blockchain projects operate in legal grey areas, especially those involving tokens, DeFi, or decentralized governance. That makes it difficult—if not impossible—to comply with the strict disclosures and standards of public markets.
Another factor is philosophy. Many blockchain founders are wary of centralized systems, including the stock market. They prefer decentralized funding, open governance, and alternative structures. For these projects, going public would contradict their core values.
Even for blockchain companies that do generate revenue and build stable platforms, public markets have been slow to embrace them. Many investors still struggle to evaluate risk in this space, and the volatility associated with crypto assets can make earnings forecasts unpredictable.
How to build a blockchain company with a viable exit
If you’re running a blockchain startup, you’ll need to think differently about your exit strategy. IPOs aren’t likely—so what’s your endgame?
For one, you might pursue a token launch. Done correctly, a utility or governance token can raise funds, distribute ownership, and build community. But you’ll need to be extremely cautious about regulatory compliance, especially with global investors involved.
Another path is acquisition. Larger crypto exchanges, fintech platforms, or infrastructure providers are actively buying blockchain startups—especially those that solve pressing problems like cross-chain compatibility, DeFi security, or identity verification.
Focus on traction. Whether your platform is used by 1,000 developers or 10 million users, adoption is your strongest asset. Show how your product is solving real problems, and document growth carefully.
Also, transparency matters. Blockchain investors are highly technical and skeptical. Publish audits, maintain open-source codebases when possible, and engage your community. The more trust you build, the more support you’ll have during funding rounds—or during acquisition talks.
Finally, consider hybrid models. Some startups choose to operate a for-profit company alongside a decentralized network. This allows them to raise VC funds, build real-world partnerships, and maintain flexibility while still embracing decentralization.
Whatever your path, clarity is key. Define your mission, stay compliant, and stay agile in a space that’s constantly shifting.
21. Average M&A deal size for AI startups: $65M; IPO average: $800M
Why AI startups see such a wide gap between M&A and IPO valuations
Artificial Intelligence continues to dominate conversations in tech, but when it comes to exits, there’s a huge divide. The average AI acquisition is valued at around $65 million. Meanwhile, AI companies that go public do so at average valuations of about $800 million.
That’s over a 12x difference—and it says a lot about how different these two paths are.
AI companies that sell early are often bought for talent, IP, or a specific model that fits into a larger product. These deals happen quickly and don’t require extensive scale. Buyers like Google, Microsoft, and Amazon want innovative teams and data pipelines—not necessarily standalone businesses.
In contrast, the AI startups that make it to IPO are usually platform players. They’ve built tools that work across industries, generate real revenue, and are deeply embedded into enterprise systems. They’ve likely built custom chips, training infrastructure, or open-source communities that make them indispensable.
When to sell your AI company—and when to keep going
If you’re running an AI startup, you’ll eventually face a big decision: sell now for a solid outcome, or push forward and aim for a massive one.
Start by evaluating your IP. Is your model defensible? Do you own unique data that competitors can’t replicate? If yes, you may want to keep growing. If not, a well-timed acquisition could bring in great returns before the market moves on.
Look at your market position. Are you a feature, or are you a platform? Features get acquired. Platforms go public. Be honest about where you stand—and where you want to go.
If you’re getting early acquisition interest, consider the strategic value. Are buyers offering a home where your technology can scale faster? Will you still get to lead your team and build your vision?
On the other hand, if you’re targeting IPO, focus on enterprise adoption. Build products that solve real business problems, create clear ROI, and integrate easily with enterprise systems.
Also, invest in trust. AI is under a microscope for bias, fairness, and accountability. Companies that handle this well will win favor with public investors.
Lastly, remember that valuation isn’t everything. A $65 million exit today might set you up for your next startup. But if you believe you’re building the future of AI—and can fund that vision—you might just be worth $800 million or more.
22. Consumer fintech companies have a 10x higher chance of being acquired than going public
Why consumer fintech skews heavily toward acquisition
In the fintech space, especially consumer-facing apps, the math is clear: you’re ten times more likely to be acquired than go public. Whether you’re offering budgeting tools, neobanking services, peer-to-peer lending, or buy-now-pay-later features—acquisition is the norm.
Why? First, regulation. Consumer fintech operates in a maze of compliance—KYC, AML, PCI, GDPR, and more. Public investors don’t always love that level of oversight. But existing financial institutions? They’re equipped for it. Buying a startup is faster than building a new product internally and allows them to innovate while staying compliant.
Second, scale. Consumer fintech companies need massive user numbers and very high retention to justify an IPO. And even then, the path is uncertain. Acquirers, on the other hand, are often motivated by strategic needs. They want younger audiences, better UI/UX, or digital onboarding—all areas where startups shine.
What fintech founders should do if acquisition is the goal
If you’re building a consumer fintech company, it makes sense to optimize for an acquisition from day one.
Start by choosing your partners wisely. Connect with banks, credit networks, and fintech APIs that might one day become your acquirer. Build a product that complements what they already do—not one that competes directly.
Make compliance a strength. Many startups treat regulation like a hurdle. Flip that mindset. If you can demonstrate robust KYC, secure infrastructure, and responsible data use, you become much more attractive to a traditional financial buyer.
Also, grow responsibly. Chasing high CAC users with promo offers and referral bonuses might work short-term, but it doesn’t build sustainable value. Focus on core financial behavior. Are users actively budgeting, saving, investing, or transacting on your app? That kind of engagement speaks volumes.
Lastly, don’t overcomplicate your stack. A clean backend, efficient infrastructure, and clear data models will help with due diligence and make integration easier post-acquisition.
If you’re in the rare group considering IPO, be aware that scrutiny is intense. Revenue quality, licensing status, and data privacy all come under the spotlight. You’ll need strong legal counsel, mature compliance systems, and a rock-solid narrative about growth and monetization.
23. IPO likelihood for robotics startups: 7%; M&A: 80%
Why robotics companies are mostly acquired
Robotics is an exciting space—automation, precision, and machine intelligence all rolled into one. But despite the buzz, only 7% of robotics startups make it to IPO. A full 80% are acquired instead.
Why? Because scaling a robotics company is hard. It requires manufacturing, hardware design, supply chain expertise, and specialized talent. These are high-cost, high-complexity challenges that many startups can’t navigate on their own.
Larger companies, especially in logistics, manufacturing, and defense, often prefer to buy robotic tech once it’s proven. They have the facilities, distribution, and capital to scale it further. Startups get access to broader channels, and buyers save years of R&D.
Another reason is lifecycle timing. Once a robotics startup reaches functional prototype or early deployment, that’s often the peak moment of value. At this stage, it’s still nimble, the team is intact, and the tech hasn’t aged.
Building a robotics startup that gets acquired—strategically
If you’re working on robotics, be realistic about the long game. IPOs aren’t impossible—but they’re rare and usually reserved for platform-level players with multi-sector reach.
So prepare for M&A.
Start by focusing on reliability. Your robot, drone, or automation system has to work flawlessly. Even minor bugs can cause major damage in the field—and erode trust instantly.
Data is also crucial. Buyers want systems that generate usable insights. Are your robots collecting maintenance data, environmental inputs, or operational feedback? Use this data to prove cost savings or productivity improvements.
Next, align with key verticals. Don’t try to serve every industry. Start with one—like warehousing or agriculture—and show deep fit. Partnerships with companies in your chosen vertical can be incredibly valuable.
Also, protect your IP. Robotics is a hardware-software hybrid, so patents, firmware protection, and motion algorithms all need legal fortification. Many acquisitions are driven by defensible IP as much as by team or traction.
If you’re considering IPO down the road, think scale. You’ll need manufacturing partners, channel distribution, and a recurring service component—like maintenance or AI subscriptions—to sustain public investor interest.
Robotics isn’t just about machines. It’s about solving hard physical problems at scale. The clearer you make that case, the stronger your exit options become.
24. Average pre-IPO revenue: $150M; average pre-acquisition revenue: $20M
Why IPOs require more maturity
When it comes to revenue, the gap between IPO and acquisition is significant. Startups going public usually generate about $150 million in revenue beforehand. Acquired startups, by contrast, average just $20 million in revenue before exiting.
This is because IPOs require proof. Public markets want companies with scale, strong customer bases, predictable revenue, and year-over-year growth. Acquisitions, meanwhile, are often strategic or opportunistic. A startup with promising tech, even without major revenue, can be valuable to a buyer with broader goals.
That’s not to say lower revenue means less value. Some of the most successful acquisitions were pre-revenue or early-revenue startups. The buyer isn’t just paying for numbers—they’re paying for potential, talent, and tech fit.
How to know if you’re headed toward IPO or acquisition
If your revenue is still under $10 million, it’s safe to assume an IPO is years away. But that’s okay—acquisition may still bring a big win.
Start by evaluating your growth trajectory. Are you doubling revenue every year? Are customer acquisition costs going down? If yes, you might be on a path to IPO—eventually.
But if your product is being used by big names, or if you’ve built technology that slots neatly into an enterprise suite, acquisition might come much sooner.
You should also look at margins. High gross margins and sticky recurring revenue increase your IPO potential. If you’re selling services with low margins, you may be better suited for M&A.
Infrastructure readiness matters too. Companies heading to IPO need mature accounting practices, internal controls, and predictable forecasting. You’ll need to close your books quickly, pass audits, and communicate financial results every quarter.
Finally, consider leadership. IPO-ready companies often bring in executives with public company experience—CFOs who know how to handle earnings calls, and COOs who can scale globally.
In the end, your revenue level is just one signal. It tells you how far you’ve come—but your future path still depends on how you scale, how you lead, and how much value you create for customers.
25. Travel tech startups rarely IPO—over 90% exit via acquisition
Why travel tech leans so heavily toward M&A
Travel tech might seem glamorous—booking platforms, itinerary tools, fare aggregators—but when it comes to exits, IPOs are extremely rare. More than 90% of travel tech startups are acquired instead of going public.
Why is that?
The sector is deeply affected by macroeconomic shifts. Travel spending is one of the first things to drop during downturns, pandemics, or global unrest. That volatility makes public investors nervous. Consistency is prized in the stock market, and travel doesn’t offer much of it.
Also, margins in travel tech are often low. Many startups rely on commissions, small service fees, or affiliate revenue. That limits profitability, even with high usage.
However, large travel brands—like Expedia, Booking Holdings, Airbnb, or even Google—regularly acquire niche travel tech players. They’re looking for differentiated tools, better UX, personalization engines, or regional market access.
Building a travel tech startup with acquisition in mind
If you’re creating something in the travel space, plan early for strategic acquisition. Identify which bigger companies would benefit from your product and how.
First, offer something unique. Everyone is doing search and booking—what’s your differentiator? It could be a better AI-powered recommendation system, a loyalty layer for independent hotels, or a seamless itinerary organizer.
Next, optimize for integrations. Travel ecosystems are messy—GDS systems, payment providers, hotel CRMs. Make sure your tech plugs into the tools already used in the industry. Acquirers will value easy onboarding.
Build strong regional traction. Travel is inherently local. If you dominate one region or traveler type—say, eco-tourism in Southeast Asia or last-minute business bookings in Europe—you become highly valuable to someone looking to expand their reach.
Lastly, focus on experience. In travel, user interface and experience are everything. A clean, intuitive design with smart personalization can make you stand out quickly.
If you’re still aiming for an IPO, be ready to show strong revenue growth, excellent unit economics, and consistent user engagement—even through slow travel seasons. You’ll also need a very sticky product, since switching costs in travel apps are notoriously low.
26. 50% of IPOs from 2010–2020 were from enterprise software companies
Why enterprise software dominates public markets
Between 2010 and 2020, half of all tech IPOs came from enterprise software companies. That’s a stunning stat—and it speaks to the strength of this business model.
Why is enterprise software so appealing to public investors? One word: predictability.
Enterprise software companies often operate on long-term contracts, with high retention rates and growing revenue per user. Their customers are businesses—not individuals—which means bigger deal sizes and lower churn. These companies can forecast revenue with impressive accuracy, a key requirement for public market success.
They also have strong gross margins, recurring revenue (often through SaaS), and the ability to upsell features, services, or usage tiers. All of this makes for a compelling growth story with relatively lower risk.
How to build an enterprise software company ready for IPO
If you’re building in this space, you’re on a promising path—but IPO readiness takes work.
First, tighten your financial discipline. From Series A onward, start treating your company like a public business. Build reliable revenue tracking, implement financial controls, and prepare clean books. This makes life easier as you grow and reduces friction during IPO prep.
Next, refine your sales engine. Can you close deals in under 90 days? Can you expand contracts over time? A predictable sales motion is more valuable than a few flashy logos. Public investors want scalable, repeatable systems.
Focus on net dollar retention. The ability to grow revenue from existing customers—through upgrades, seat expansion, or added modules—is one of the best indicators of product value. It’s also something Wall Street loves.
Build a product roadmap with enterprise buyers in mind. Security, compliance, uptime, and support all matter. Even if your tech is world-class, CIOs won’t buy unless they trust your infrastructure.
Also, prepare your team. Start thinking about leadership transitions early. Many IPO-stage companies bring in public-experienced CFOs or GCs in the year leading up to the listing. These people know how to navigate regulatory filings, roadshows, and earnings calls.
Lastly, start investor storytelling well before you file your S-1. Communicate your long-term vision, product differentiation, and market opportunity with clarity. Analysts and institutional investors follow narratives as much as numbers.
Enterprise software IPOs aren’t just common—they’re often very successful. But you need discipline, focus, and execution to get there.
27. Median time to IPO: 8 years; median time to M&A: 4.2 years
Why exits happen faster through acquisitions
On average, startups that go public take about 8 years to do so. Those that get acquired do it in roughly half the time—around 4.2 years.
This makes sense when you look at the level of maturity required. IPOs need scale, revenue, legal rigor, and brand recognition. It’s the business equivalent of graduating from university—years of preparation, discipline, and presentation.
Acquisitions are more flexible. They can happen when a startup has valuable technology, early user traction, or strategic relevance to a buyer. You don’t need to hit $100 million in revenue—you just need to fill a gap that someone bigger wants to solve.
For many founders and investors, that faster timeline is appealing. It reduces risk, returns capital earlier, and opens new opportunities. But it also means letting go of long-term ownership and control.
What timeline is right for your startup?
As you grow, think carefully about your goals—and be honest about your strengths.
If your startup is fast-growing, scalable, and serving a big market, going public might make sense. But that means investing in the long road: corporate governance, financial systems, and investor relations.
If you’re building something novel, niche, or deeply technical, and you’re getting inbound interest from buyers, acquisition might be the better path. You can exit faster, keep your team engaged, and use the parent company’s resources to expand your vision.
Time also affects your cap table. The longer you stay private, the more rounds you may raise—and the more equity you’ll likely give up. An earlier exit means less dilution but also less potential upside.
Keep your board aligned on exit timing. Some VCs have fund timelines that pressure startups toward a sale. Others are willing to wait for an IPO. Understanding your investors’ priorities will help you plan smarter.
Ultimately, success isn’t about how long it takes—it’s about what you achieve and how well you execute. Whether in 4 years or 10, choose the path that aligns with your product, your mission, and your market.
28. IoT startups: 92% acquisition rate; IPOs account for under 5%
Why IoT companies mostly exit through acquisition
The Internet of Things (IoT) sector is growing rapidly—smart homes, industrial sensors, connected cars, wearables—but very few companies go public. In fact, fewer than 5% of IoT startups IPO, while a massive 92% are acquired.
Why is this so lopsided?
The first reason is technical complexity. IoT companies build hardware and software systems that need to work flawlessly together. They operate across multiple environments—cloud, edge, mobile—and have to meet strict latency, security, and interoperability standards. That’s a lot to manage while also trying to scale revenue.
Second, monetization is tricky. Many IoT solutions are bundled into OEM products or sold as part of a service layer. That makes it harder to create a standalone business model that attracts public investors.
Acquisition, however, makes perfect sense. Larger industrial companies, telecom giants, and cloud platforms constantly seek new capabilities to strengthen their IoT offerings. Acquiring a focused, innovative startup can save them years of R&D.
How to build a valuable IoT company for acquisition
If you’re building in IoT, start by mastering reliability. Connectivity issues, data loss, and device instability are deal-breakers. A system that works well 99% of the time isn’t good enough—acquirers expect industrial-grade resilience.
Next, focus on solving a specific problem. Generic platforms don’t cut it in IoT anymore. Whether it’s predictive maintenance for manufacturing or real-time tracking for logistics, you need to show how your solution improves operations or cuts costs.
Also, make your solution easy to integrate. If your devices, dashboards, and data flows can plug into existing systems like AWS IoT Core, Azure, or Siemens platforms, your acquisition potential increases dramatically.
Security is another must-have. With billions of connected devices, data breaches in IoT are a growing concern. Demonstrate robust encryption, endpoint protection, and compliance with standards like ISO 27001 or NIST.
If you’re one of the rare few aiming for IPO, you’ll need to show large-scale deployments across multiple verticals, recurring revenue streams (like SaaS overlays or analytics subscriptions), and solid unit economics.
But for most, acquisition is the winning play. So position your company as a critical link in someone else’s digital transformation story.
29. IPO exit multiples are typically 3x higher than M&A multiples across sectors
Why public markets pay more—when you can get there
Across sectors, startups that go public achieve exit multiples that are roughly three times higher than those that are acquired. This means a company going public may command a valuation of 10x–15x revenue, while M&A deals often close around 3x–5x revenue.
Why the gap?
Public investors bet on growth. If your company can show strong momentum, scalable systems, and a big addressable market, they’ll price in future potential. IPOs are aspirational—they price in where you’re going, not just where you are.
Acquirers, meanwhile, are often more conservative. They factor in integration costs, cultural alignment, and product roadmap overlap. They’re also typically buying based on today’s numbers and immediate strategic fit.
That’s why IPOs can bring bigger paydays—but only for startups that are truly ready.
Should you hold out for an IPO—or exit early?
This is the million-dollar (or billion-dollar) question.
If you’re growing steadily, with healthy margins and a clear roadmap to profitability, an IPO might be worth it. You’ll retain more independence, raise more capital, and have more control over your future.
But you also take on new risks. Public markets are volatile. Quarterly pressure is real. And governance requirements are intense. Some founders thrive under that pressure. Others burn out.
If your growth is peaking, or if a buyer offers a strategic exit with strong alignment, M&A might be the better call—even if the multiple is lower. You avoid dilution, reduce risk, and potentially unlock other opportunities, like leading a new business unit or launching your next venture with a win behind you.
The key is to know your metrics. What’s your LTV/CAC ratio? Your burn rate? Your path to profitability? These numbers should guide your decision—not just market sentiment or FOMO.
Talk with your investors. Understand their return timelines and exit preferences. And most importantly, be honest about what kind of journey you want to build.
A smaller multiple today with less stress may be better than a bigger one later if it comes at the cost of your mission, team, or mental health.
30. Agtech IPOs are extremely rare (<1%); over 95% exit via M&A or remain private
Why agtech startups rarely reach public markets
Agricultural technology, or agtech, is one of the least likely sectors to reach IPO. Fewer than 1% of agtech startups go public. Over 95% either get acquired or stay private.
There are several reasons for this.
First, agtech is tough to scale. The customer base—farmers, co-ops, and distributors—is dispersed, price-sensitive, and often slow to adopt new tools. Seasonality also complicates things. You don’t get twelve sales cycles a year—you get one or two.
Second, revenue growth is slow. Adoption takes time, and even when usage increases, margins can remain thin. Public markets want fast-growing, capital-efficient businesses. Agtech doesn’t always fit that profile.
But there is good news. Large agribusinesses, food companies, and equipment manufacturers are actively acquiring agtech startups to boost efficiency, collect better data, and offer smarter tools to their customers.
How to build an agtech startup with strong M&A potential
If you’re operating in agtech, understand early that IPO is unlikely. So focus your business on solving a pressing, visible, and measurable problem.
Start with validation. Demonstrate clear ROI—does your software save water, reduce pesticide use, improve yields, or cut costs? Document that data and make it shareable.
Second, be boots-on-the-ground. Relationships matter in agtech more than in most sectors. Go to trade shows, walk fields, visit cooperatives. The more you understand your customer’s workflow, the better your solution will be—and the stronger your word-of-mouth.
Design your product to integrate with the tools your users already rely on, from precision equipment to ERP systems. The more embedded you become, the harder you are to replace.
Also, think about data. Can your system provide insights that a large agribusiness can use across its global operations? The more strategic your data becomes, the more valuable your company will be.
Lastly, nurture relationships with strategic buyers. Companies like John Deere, Bayer, and Syngenta aren’t just watching—they’re actively acquiring. If you can prove your product’s impact in the field, they’ll want in.
Agtech might not be glamorous on the Nasdaq—but it’s incredibly valuable in the real world. And the right exit doesn’t have to be public to be powerful.
Conclusion
After diving deep into data across 30 different insights and sectors, one thing is clear—your industry shapes your exit strategy more than almost anything else. Whether you’re a founder building the next AI platform or a healthtech innovator improving patient outcomes, understanding the odds, timelines, and valuations tied to IPOs versus acquisitions will help you make smarter decisions.
