Aah… The Exit. That elusive end goal that is the dream of many founders and entrepreneurs. Once a founder has built a business to a certain scale and profitability, there is nothing more natural than the desire to sell the business to another (larger) company or to sell stocks to the public through an IPO. This is not always the case and not all founders have to seek an exit, but, there are a few core reasons why so many founders do seek it and why the success of a startup ecosystem is closely correlated with this.

First, an exit means a huge pay day for the founders and the rest of the team. It is the “high reward” moment that justifies the “high risk” people have been taking in the run up. Secondly, the experience and know-how of building a business from scratch is incredibly valuable (and expensive in terms of time, money, personal and psychological resources). So it makes absolute sense that a founder would want to use this hard earned skill again. Your second startup is not a walk in the park either, but is considerably easier (mostly because you now have more money, more connections, are known as a success story and filled your psychological well).

Having done an exit is good for the founders, yes, but it is also sign of a mature ecosystem. More exits will inspire more people and you have a virtuous cycle in your hand that will keep growing the economy and concentrate more talent into your ecosystem.

Among the resources we have searched through, the most succinct analysis regarding exits came from the Startup Genome Success Factor assessment. The first big takeaway is that Silicon Valley “stands head and shoulders above other ecosystems” compared to others. When it comes to London, it is ranked 3rd, but more interesting are the sub-factors of that ranking…

Whereas the Silicon valley is a 10 in all these four factors, London is a different story.

Ecosystem Value: 6

Exits: 7

Startup Output: 8

Startup Success: 5

What’s most striking here is that London scores a measly 5 out of 10 in startup success which is detailed below.

