Today, most unicorns are more of a myth than reality

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The speed at which it happened New billion dollar startups are free falling.

Given what we’ve seen recently of the late-stage funding market, we shouldn’t panic. As the late-stage dollar retreated and capital poured into mega-rounds—deals worth $100 million or more—diverted, the fuel that once propelled many startup rockets into the valuation stratosphere dissipated. It makes sense that fewer companies reach the unicorn-height.

In the beginning, with M&A activity and the creation of new unicorns declining, without the ability to exit; of course The rate at which new unicorns are created falls. If paper tokens can’t be converted into liquid, then paper tokens are worth less, right?


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That’s a very generous interpretation, because in the past it was based on the assumption that unicorns were worth more than they were perceived to be.

Of course, the last venture capital supercycle has indeed built some real unicorns. Uber is worth north of $60 billion; Coinbase is worth a little over $16 billion this morning – you can fill in other names. But here’s the catch: Most unicorns haven’t found an exit, and as the market realizes that most billion-dollar startups aren’t natural, capital flowing into them has slowed.

Let’s take the argument a step further: if most unicorns didn’t exit during the election and can’t do so now that their actual valuation is less than their last private label (and probably less than $1 billion today), the startup in question was ever really a unicorn?

I guess the answer is no. Most unicorns were never what they were supposed to be. Instead, many startups have been given big budgets for LARP thanks to unicorns and targeted venture capital funds, in turn thanks to a combination of low interest rates and a sluggish global economy brought on by Covid.

Don’t you believe me? Check out this chart from the new CB Insights Q1 Venture Report:

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