Much of the debate over the surging crop of some 84 (or 87 or 118 depending on who is counting) unicorns (and don’t forget the nine decacorns!) has been limited to why they’ve suddenly appeared in such quantity.
People debate how meaningful that $ 1 billion number is, or is not, to the actual health of a company. Some with horns even argue it’s “arbitrary as fuck.” And pundits stress about whether or not those lofty valuations– which in aggregate have quadrupled in 2015 to an insane half a trillion dollars– will ever— ever— amount to a publicly tradable price in the same range.
It’s lead to handwringing about IPOs as “the new down rounds,” and some pretty alarming stats have gained currency. Like the one pointing out that 23 companies raised more than $ 40 million in growth rounds in 2014. That sounds great for entrepreneurs until you consider that only 240 venture capital-backed IT companies have gone public in the last 10 years. And that’s before you consider the pre and post-IPO valuations of those companies.
Now there’s a new reason to fear the ‘corn: They are insanely capital inefficient. And over the last year, they’ve gotten even more so at an alarming rate…
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