The last piece left a mid-market buyer with a practical problem. The companies are out there — capable, funded, without a venture exit coming. But where would you even start looking?
— 7 min read
Most people start in the wrong place. They look at the companies still raising, still posting hype, still visible. That’s a reasonable instinct and it’s almost exactly backwards. To see why, it helps to look at what our data says about time.
Close to nine in ten funded startups never record an exit, so the pool of capable, funded companies without a venture route is large. Knowing it exists is not the same as being able to see into it: there is no list, no screen, and no way to tell which of those companies would take the call. Part three is about where a mid-market buyer would actually start.
The venture clock
There’s a window, and it’s narrower than most people assume. Across the funded portfolio companies on our platform, 76% of all exits happen within six years of the first investment going in. Our first blog post put the average at 4.4 years. The distribution behind that average is tight: nearly a third of exits land between years two and four, another quarter between four and six, and then it thins out fast.
That’s the rhythm the venture model is built around, and it’s the rhythm everyone watches. Raise, grow, exit, return the fund. A company that follows it is visible the whole way, because raising money is mostly a public act.
The problem is that this is the investor’s clock. It isn’t the company’s.
Quiet is not the same as finished
Of all the exits in our data, only 49% happened within three years of the company’s last funding round. The other half came later. And 22.5% arrived five or more years after the company had last raised anything at all.
We wanted to know what that means for a company still sitting quiet, so we ran a simple test. We took every company that had gone three full years without raising and hadn’t yet exited, and asked whether they still went on to exit later. Most didn’t. But 11.0% of them did. To know whether that’s high or low, you need something to compare it against: across all the companies we can track over time, 13.3% eventually exit. That’s the baseline — a typical company in the data. The quiet ones, at 11.0%, sit only just below it.
That small gap is the point. Going three years without raising leaves a company more than four-fifths as likely to reach an exit as an average one — 11.0% against 13.3%. Stretch the silence to five years and it’s still 8.7%, about two-thirds of the baseline. Going quiet dims a company’s odds a little; it doesn’t switch them off. The outcomes still come — they just come later, and more spread out, than most people are willing to wait for. A company that’s been off the funding radar for years isn’t finished. It’s running on its own clock.
It’s tempting to read a long funding gap as a company quietly failing. Our data can’t settle that either way — we can’t see revenue, headcount or anything else operational, so we’re not going to claim these businesses are all thriving. But it doesn’t back the failing story either. Most companies never reach an exit, quiet or not — and not reaching an exit isn’t the same as failing; plenty are trading along perfectly well with no intention of selling. The quiet ones get to an outcome at almost the same rate as everyone else, which means a gap in the funding record isn’t the red flag it’s taken for. It’s not a diagnosis.
What predicts an outcome — and what doesn’t
Two more things worth knowing, one of which is a negative finding.
Early momentum matters. Companies that raised a second round within eighteen months of the first went on to exit at 17.1%. Those that took longer exited at 12.7%. Speed early on is a good signal.
How much money went in tells you less than you’d think. Split the companies into quartiles by total capital raised — least to most — and the exit rates run 13.0%, 12.2%, 12.1% and 14.9%. The biggest raisers do exit most often, so it isn’t nothing. But it’s a much weaker signal than the attention capital gets would suggest. The three lower quartiles barely differ, and the lift only shows up at the very top — if more money reliably bought better odds, you’d expect the rate to climb steadily across the quartiles, and it doesn’t. Capital raised is the single most reported number in the startup press. On this evidence it’s a modest signal at best, not the dividing line it’s treated as.
One caveat on both, worth being straight about: they tell you whether a company reached an exit at all, not whether it was a good one. We can see that a company exited, not what it sold for.
The pool nobody’s watching
Put the timing findings together and a specific population comes into focus.
Around 4,000 companies on our platform haven’t exited yet. Of those, 2,485 — nearly two-thirds — haven’t raised a new round in three years or more. And 1,319 are further out still: more than six years past their first investment, and no new funding in the last three. These are companies that have dropped out of the venture window and off the funding radar at the same time.
The obvious assumption is that this group is where the failures are. But it’s the opposite: this is exactly the cohort that keeps producing exits, years after everyone stopped watching.
What makes them interesting to a mid-market buyer isn’t that they’re cheap or desperate. It’s that almost nobody is competing for them — and the competition has been thinning, not growing. The venture world has stopped watching, because by its standards the story is over. And corporate buyers have also been retreating from this end of the market: strategic acquisitions of US middle-market companies fell nearly 29% by count in 2025, even as US middle-market exits overall rose 12%.¹ The corporates that stayed acquisitive went hunting for mega-deals instead. Across global M&A, deals under $100m declined in both number and value last year, while $1bn-plus transactions hit their strongest run since 2021.1
Set that alongside our own numbers and the shape of the opportunity is hard to miss. On our platform, thousands of these companies are sitting outside the venture window with no exit lined up. And one of the main routes to a sale has been narrowing: strategic acquisitions of US mid-market companies fell nearly 29% by count in 2025.2
The awkward part
None of this tells you which of those 1,319 companies is worth buying. We can’t see their revenue, their growth, their team, or what any of them would sell for. That call belongs to the buyer who knows the market, not to a dataset.
What the data does tell you is where to look, and that the assumption keeping everyone away from this pool is wrong. Quiet doesn’t mean finished. Six years old doesn’t mean over. The companies with no recent round aren’t the leftovers — they’re the ones that stopped playing a game they were never going to win, and carried on being businesses.
Which leaves one problem, and it’s the one we started with in the last piece. Knowing the pool exists isn’t the same as being able to see into it. There’s no list. No screen. No way for a mid-market company to find the handful of businesses that fit what it’s actually looking for — or to know which of them would even take the call.
That’s the problem we’ve been working on — and it’s what the next piece is about
Continue reading
Why mid-market companies are the missing piece in the startup exit puzzle
Mid-market companies can’t build digital capability fast enough, and rarely buy it. Startups without a venture exit already have it. Why aren’t the two connecting?
← Part 2
