Predictive AI

Exit Potential Score Explained

The Exit Potential Score is a predictive metric designed to assess a company's likelihood of achieving a successful exit, such as through an acquisition or an IPO. It is one of the eight component scores that make up the Hatcher Score, which aims to help investors identify promising start-ups and enable founders to showcase their potential. The Exit Potential Score ranges from 350 to 900 (averaging around 650) and provides valuable insights into a company's exit prospects compared to similarly situated companies.

January 2, 2025

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2 min

What Is the Exit Potential Score?

The Exit Potential Score is a predictive metric designed to evaluate how likely a startup is to achieve a successful exit. As one of the four key components in the Hatcher Score, it is robustly data-driven. Our 24-month research found that startups in the top 10% of Exit Potential Scores had a 159% higher chance of an exit compared to those in the bottom decile, and a 58% higher likelihood than the remaining 90% of companies. Read more about our study here.

It’s measured on a scale from 350 to 900, which helps you quickly see a startup’s exit prospects in comparison to similar ventures.

What Is the Average Exit Potential Score?

On average, companies score around 650. This middle-of-the-road figure can mean one of two things: either the startup’s chances of an exit are fairly typical, or there might be limited data available. In cases where little information is known, our scoring engine defaults closer to this midpoint.

What Is the Range of the Exit Potential Score?

Although the official range is from 350 to 900, you’ll typically see scores fall between 400 and 850. We set these practical boundaries to reflect the limitations of predictive models, keeping the scores aligned with realistic expectations for potential exits.

How Is the Exit Potential Score Calculated?

The Exit Potential Score leverages machine learning and proven regression methods to analyze everything from industry trends and company size to historical exit rates. By comparing a startup to similar businesses (and their own exit histories), the system derives a score that indicates the startup’s comparative chances of being acquired or going public.

How Should I Use the Exit Potential Score as an Investor?

Think of the Exit Potential Score as one piece of a larger puzzle. It can help you prioritize which startups to investigate more thoroughly, but it’s not meant to stand alone as your final verdict. Consider it alongside factors like your personal risk tolerance, investment strategy, and knowledge of the market to make a well-rounded decision on whether, or how much, to invest.

What other proprietary analytics does Hatcher+Score provide?

While the Exit Potential Score is a crucial part of our offering, it’s just one piece of Hatcher’s comprehensive analytics suite. Other highlights include:

The Other Components of the Hatcher Score (eight in total)
Valuation Projection

Together, these tools provide both investors and startups with a detailed view of a venture’s prospects. By combining the Exit Potential Score with our other specialized metrics, you can more easily identify opportunities that match specific goals and risk profiles.

In Summary

The Exit Potential Score offers a data-driven glimpse into a startup’s likelihood of achieving a significant exit, helping you decide where to focus your attention and resources. It’s a powerful analytic for investors looking to back the right companies – and for founders eager to showcase their potential. To explore further and see how Hatcher’s analytics can support your decision-making, check out the full suite of Hatcher Score components and our Valuation Projection tool.

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