# My 5x exits came from capital-efficient companies. Almost all my big bets failed. - Author: Petri Lehmuskoski - Published: 2026-10-14 - Group: Investor Lens - Canonical: https://morescarsthantrophies.com/writing/my-5x-exits-came-from-capital-efficient-companies Almost all of my big bets failed. Over 18+ years as a startup investor, more than ten of my investments have returned over five times the money we put in, and those returns came mostly from camel companies: capital-efficient businesses that grow on customer money instead of on the next round. A study published last month made me look at that count again. It measured how many professional venture investors ever back even one big winner, and most never do. How low can the bar be, if two out of three people investing for a living never clear it? ## Two out of three venture investors never back a single big winner Ilya Strebulaev of Stanford GSB and Blake Jackson tracked over 37,000 investment professionals at US venture capital firms from 1996 to 2025 (NBER Working Paper 35501, July 2026). They counted an investment as successful if the startup later went public, reached a valuation of at least $1 billion, or was acquired for at least five times the total capital it had raised. The authors report that the results hold at two and ten times as well. Of the investors with at least one investment on record, 38% were ever credited with a successful one. The other 62% went through their careers without a single hit. The money is even more concentrated than the hits. In the same paper, the top 5% of investors produced about 90% of all net profits, and the top 1% about 57%. ## Ten winners in one career is a 3% outcome The count falls fast after the first hit. In Strebulaev's write-up of the same dataset (Substack, 8 September 2026), 38% of investors reach one successful investment, 22% reach two, 8% reach five, and 3% reach ten. Figure 1. Most venture careers end before a second winner. Share of US venture investment professionals with at least 1, 2, 5 and 10 successful investments over a career: 38%, 22%, 8% and 3%. Successful means an IPO, a valuation of $1B or more, or an acquisition at 5x or more of total capital raised. Source: Strebulaev and Jackson, NBER Working Paper 35501 (July 2026); Strebulaev, Substack, 8 September 2026. Fewer than one in thirty make it to ten. With each additional hit, a large share of the investors still in the race drops out, and nobody reaches a number of wins after which the next one gets easy. My count is not on their curve. Their test is about the company: an IPO, a unicorn valuation, or a sale at five times the capital raised. Mine is about the money: investments that returned more than five times what we invested, across Gorilla Capital's funds and my own angel tickets. A small company that raised little can pass my test and fail theirs, and their sample is US venture professionals while I invest mostly in Nordic companies. What the comparison does show is how rare repeated high multiples are, for anyone. ## More than half of angel exits lose money Angel data points the same way. FiBAN, the Finnish Business Angels Network, studied 126 Finnish angel exits with Ruben Moring of Åbo Akademi in 2017. 54% of the exits were unprofitable, even though the pooled return across all of them was 25% a year. In the US, Robert Wiltbank and Warren Boeker surveyed 539 angels in groups for the Kauffman Foundation in 2007. 52% of the exits returned less than the angel had invested, and the 7% of exits that returned more than ten times produced 75% of all the cash. Both studies probably make angels look better than they are. The angels who stay in groups and answer surveys are the ones still investing; the ones who lost everything and left are harder to count. So the typical angel exit loses money, and a handful of exits carries the whole return. Most angels I meet answer that by dreaming about the unicorn that pays for everything. Angels need to think, not to dream. In the cases I've seen, the dreamers are the ones writing FOMO cheques. ## A trade-sale company chose the unicorn path and is still searching ten years later One of our cases was a clear trade-sale company with a great product and customers. It could have been exited while the founders were still majority owners. Instead the founders ended up between investors with diverging interests, and chose the unicorn path. Almost ten years later they are still searching for the large business, and the founders have been diluted round after round. In that time the value of the company has grown five times, and the founders' stake has shrunk by 60%. I believe it will still be an acceptable exit for the late investors. The founders' reward for those years will be minimal. For an angel, the growth is the trap. A company can multiply its value five times and still return nothing to the people who funded it until somebody buys it, and each round the company raised for the unicorn path increased the price that buyer would have to pay. ## Stricter rules every year produced the repeat exits The 5x exits came mostly from camel companies, the ones that could choose when to raise and that a buyer had a reason to own. The big bets almost all failed. The ten-plus are part of the 20+ positive exits I have been involved in, and they took 18 years. They have come more often the longer we have kept the same investment strategy. In my experience, most angel investors quit before they learn to build theirs. Over those years I made my rules stricter, again and again, and I read more and more exit data before each investment. Gorilla Capital's first fund has returned more than three times its paid-in capital in cash, with three good companies still in the portfolio. My own angel portfolio has returned a multiple of that. ## Decide the exit you need before you invest In my experience, the angel investing on FOMO thinks only about the company he is afraid to miss. The required exit never enters the decision. One exit from our own portfolio shows the other way. When we invested, the company barely looked like a startup by fashionable standards: a founder in his fifties who had built and exited companies before, a real product sold on multi-year contracts, meaningful revenue, months from cashflow positive. The entry valuation was in the single-digit millions. The exit section of our investment memo named the buyer logic before the first euro went in: a large, growing market under efficiency pressure, and deep-pocketed players keen to buy proven assets. The company grew over 70% a year while being very profitable, and never needed the next round. Three and a half years after our investment it was acquired, at twelve times our money net of transaction costs, from a single seed ticket. Even that closing slipped two quarters on ordinary deal friction. The required exit is arithmetic, and it takes five minutes before the money goes in. Take the post-money valuation you are paying, the multiple you need, and the ownership you will still hold at exit once later rounds have diluted you. As an illustration: at a €4M post-money valuation, a 5x target and 40% dilution before the sale, the company has to sell for roughly €33M before your ticket returns five times. Then compare that number with the exits that actually happen in your market and your sector, and name who would buy the company at that price and why. Read the published exit values with care: the small deals rarely announce a price, so the published numbers sit higher than the real middle of the market. If the required exit only works as a unicorn, the investment is a unicorn bet whatever the founder says, and the numbers above show how rarely those pay anyone back. A strategy is these rules written down before the pitch meeting, so that an angel feeling FOMO has a test to pass instead of an open cheque book. If you have a clear strategy and work toward it, it works. ## In most European markets, the strategy needs 40+ companies The strategy fails when the portfolio is too small. Repeated high multiples are rare even for professionals, and a portfolio of ten companies can easily hold none. The smaller the market and the less mature its local exit market, the larger the portfolio has to be. Most European markets are smaller than the US market the study measured, and their exit markets are less mature. In every European market except the five largest, that means 40+ companies. The unicorn-path company is worth five times what it was when it chose the unicorn path. Its founders hold 60% less of it, and none of that growth has yet come back as money to the people who funded it. Angels are taught to measure a company by how big it becomes. The ecosystem does not work if it does not return money, at least 1x. *The exit counts and fund figures are my own records across Gorilla Capital's funds and my personal angel investments, stated as floors. The company in the scar is not named. Earlier pieces on angel exit math are at [morescarsthantrophies.com/writing](https://morescarsthantrophies.com/writing).* More scars than trophies.