There is a very good article by Galen Moore in MHT about the decreasing time to exit for venture funded companies. I think we can all imagine that there have been a number of factors that may be shortening average time to exit in the last year (one thing is the massive triage that many funds have had to engage in). 

But, I don’t think that the numbers quoted from VentureSource in Moore’s article are correct. He says that average time to exit in 2009 was five years. I imagine, but I don’t know, that what that means is that of the companies that had exits in 2009, the investors had been invested on average for a period of five years. I don’t know the methodology used to arrive at that number. For example is this the period from the first series A investment to the exit or did they average the holding period of the A, the B, the C and so on. 

In any event, my research and anecdotal evidence suggest that the period from the initial series A investment to the exit is about 10 years (in general) and somewhat less, perhaps 8 or so, for top tier funds. Of course many factors influence this time period not the least of which is what industry are you talking about. An investment in a iPhone app is likely to get to exit sooner than an investment in a cancer drug. 

Having said all t his, the significance of this number is that it interacts with the total amount of financing needed (the longer the time to exit the higher the probability of needed more financing) and the life of most funds (what happens if there are seven years to exit and your are in year five of a fund?).

These are factors that a savvy entrepreneur will consider, assuming he or she has choices among investors.