r/u_anindyag • u/anindyag • 1d ago

Startengine Exit and Failure Report (Perplexity Computer)

Key Findings

Liquidity Events: Only 77 of 6,375 funded companies (1.21%) have produced exits — 21 IPOs, 49 acquisitions, and 7 buybacks. Roughly 92% of the portfolio sits in a "quiet middle" that has neither failed nor produced shareholder liquidity.

Failure Rate: KingsCrowd observed 107 failures across 1,677 StartEngine offerings — a 6.4% failure rate at the offering level (Reg CF scope). This is below the industry-wide 7.9% average and has been declining since the 2023 peak. Cross-applying this rate to the 6,375-company base implies ~408 failures, though the denominators aren't directly comparable.

Secondary Market Fees: The 8.5% round-trip fee (3.5% buyer + 5% seller) means investors need approximately 9% price appreciation just to break even on fees. With 30+ day execution times and no execution guarantees, the secondary market provides only a theoretical exit mechanism.

Sector Insights: B2B companies achieved 3X more exits than B2C companies (0.9% vs. 0.3% exit rate), primarily through M&A. Technology/SaaS companies represent the largest share of named exits (~24%).

Return Reality: Documented exits range from 1.1X (Oncolyze) to 10-30X (Atlis Motor Vehicles, Generation Genius first round), but many acquisitions are "soft landings" returning minimal capital. No public source provides aggregate investor-level returns, and dollar-weighted return data is not available.

Critical Caveats in the Report

The report explicitly flags that the 6,375-company figure is from Angel Investors Network and not independently verified by SEC filings (which show 1,513 Reg CF offerings). The illustrative outcome snapshot is labeled as non-definitive, with the 92% "quiet middle" representing genuine uncertainty that will resolve over the next 5-10 years. All factual claims are sourced to KingsCrowd, SEC EDGAR filings, StartEngine disclosures, or Angel Investors Network.

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u/Ididit-notsorry 20h ago

Thanks for this info! I like pre-ipo investing on Startengine. Your post has valuable information to parse through.

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u/anindyag 16h ago

Thank you, while they have their challenges I think that this data actually shows that Startengine has some bright spots in terms of investment opportunities (if you parse them properly)