Investment Banks: The Most 'Successful' Type of Gov Tech Investor

A look at the exit rates among gov tech investors.

by / April 10, 2017

Even in the world of urban, government technology, activist and civic tech investing — socially conscious as it is — the idea is to find companies that will make a splash when they exit.

After looking at which types of investors are most common in the government technology market space, e.Republic* Chief Innovation Officer Dustin Haisler dipped into a second metric to get a picture of the nature of the financiers: exit rates. That is, the number of portfolio companies that have merged, been acquired or gone public divided by total number of investments.

The numbers, perhaps unsurprisingly, tend to get larger as they lean toward the types of investors that typically run for later-stage companies. But they help to nail down the scope of expected success in this particular market.

Even among backers with the best rates in the gov tech space, investment banks, less than one-third of portfolio companies achieve an exit. No. 2 on the list is private equity firms, with a 23.7 percent exit rate, followed by corporate venture capital at 22.8 percent. Incubators and accelerators were the bottom two among the 10 most prevalent investor types in the space, both with exit rates at about 8 percent.

The list pulled data from more than 200 investors on Crunchbase and was date-agnostic — that is, this research included all available data for each investor up to 2017.

*e.Republic is Government Technology’s parent company.