More Horns, Please

More Horns, Please

We don’t remember there being a line of unicorns in the stories we read growing up, but it seems every day we are seeing more in our LinkedIn feed.

We don’t remember there being a line of unicorns in the stories we read growing up, but it seems every day we are seeing more in our LinkedIn feed. The term has been a benchmark to identify venture-backed startups with valuations over $1BB since it was first used in 2013. 

Since companies kept growing, we got more horns… 

  • Unicorn – Over 1 Billion
  • Decacorn – Over 10 Billion
  • Hectocorn (AKA “Super-Unicorn”) – Over 100 Billion  

When Aileen Lee originally coined the term “unicorn” in 2013, there were only 13 companies that were considered unicorns. Fast forward to February 2021, and CB Insights reported there are over 500 unicorns and 30 decacorns worldwide, including SpaceX, Stripe, UiPath, and Databricks.  We dug into the numbers a little:

So why is this happening?

  • VC has become VERY competitive – Venture Capitalists have never had so many other VCs to compete against. The high demand vs. supply is driving valuations through the roof. 
  • Low interest rates – With interest rates expected to stay low for the foreseeable future, “VC funding is going to be very strong; liquidity is going to be very high, so the money is going to flow into these companies,” – Santosh Rao, Head of Research at Manhattan Venture Partners.
  • People are buying them – The market is good for unicorns. With low interest rates and slow growth environment, many companies focus on acquisitions instead of focusing on capital expenditures and development.
  • Longer unicorn lives – The average age of a technology company before it goes public is eleven years, as opposed to four back in 1999. Companies are taking on more investment money and growing larger. 
  • They can – Companies now have the option to grow and scale fast without needing the infrastructure of a larger company or money from the public market. 

We want to celebrate everyone’s success, but please don’t show off until you can poke more than one hole with your head!

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