02 · The exits → The edge
The edge
Regulated companies reach exit 2.22x as often.
Across 19,416 four-market companies, the cohort behind a licence or compliance barrier survives to exit at 13.41% against 6.03% for the rest. The gap is observed, not assumed.
The same barrier that screens before entry defends after it.
A regulator has either created a licence a company cannot operate without, or compelled its customers to buy what the company sells. Either barrier is hard to replicate, so the company that clears it first tends to keep the position. In the four-market dataset that shows up as a higher rate of reaching exit.
Observed exit incidence, regulated vs unregulated cohort
13.41% reach exit, against 6.03% unregulated · 19,416-company four-market dataset
Near parity at seed. The premium appears later.
Entry is close to the unregulated price. The regulated round-size premium widens as the company moves up the stages, so the advantage is paid for at seed and collected later.
Regulated cohort relative to the unregulated cohort. The gap opens by Series C.