Learnings to date about the “Unicorn Club”, a Billion-Dollar Startup

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Welcome To The Unicorn Club: Learning From Billion-Dollar Startups

  1. We found 39 companies belong to what we call the “Unicorn Club” (by our definition, U.S.-based software companies started since 2003 and valued at over $1 billion by public or private market investors). That’s about .07 percent of venture-backed consumer and enterprise software startups.

  1. On average, four unicorns were born per year in the past decade, with Facebook being the breakout “super-unicorn” (worth >$100 billion). In each recent decade, 1-3 super unicorns have been born.

  1. Consumer-oriented unicorns have been more plentiful and created more value in aggregate, even excluding Facebook.

  1. But enterprise-oriented unicorns have become worth more on average, and raised much less private capital, delivering a higher return on private investment.

  1. Companies fall somewhat evenly into four major business models: consumer e-commerce, consumer audience, software-as-a-service, and enterprise software.

  1. It has taken seven-plus years on average before a “liquidity event” for companies, not including the third of our list that is still private. It’s a long journey beyond vesting periods.

  1. Inexperienced, twentysomething founders were an outlier. Companies with well-educated, thirtysomething co-founders who have history together have built the most successes

  1. The “big pivot” after starting with a different initial product is an outlier.

  1. San Francisco (not the Valley) now reigns as the home of unicorns.

  1. There is very little diversity among founders in the Unicorn Club

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