Collective value of UK’s top 500 start-ups rises more than six times between 2011 and 2017
Research from online investment platform SyndicateRoom has revealed that investors in early-stage equities have enjoyed a seventh consecutive year of 30 per cent growth.
Early-stage equities: A long-term study – conducted in partnership with research firm Beauhurst – is the second piece of in-depth analysis of the financial performance of early-stage investment into 519 UK start-up businesses between 2011 and 2017.
The report’s findings include:
Of the 519 companies in the cohort, 14 per cent had gone onto exit (a trade sale or stock market listing) successfully generating combined returns of £3,785,896,091. These successful businesses outperformed their peer-group by increasing in value at 42.6 per cent per year up to the point of exit.
Are IPOs better for exits than M&A?
The study also found that businesses that exited via an IPO (initial public offering) grew faster than businesses that exited via an acquisition. Companies that went to list on NASDAQ grew in value at a staggering 98 per cent per year. One of the fastest-growing companies in the cohort, Adaptimmune, grew in value at 107 per cent per year and went to list on NASDAQ with a valuation of over £1.2bn.
Early-stage investing does carry risk – 14 per cent of the companies (73 in total) in the cohort failed, resulting in a total loss of value for investors. The majority of the companies that are no longer in business – 31 – failed in 2017.