Mirror tokens logo Republic Mirror Tokens

Invest in the performance of the world’s top private companies
Join the waitlist
 
Republic Republic Republic
  • Log in
Oops! We couldn’t find any results...
Can’t find a deal? Try advanced search.
Is something missing? Add your suggestion here.
Primary market Live deals Secondary market Buy and sell Republic Note Own a piece of Republic's upside Investor Network Membership Receive exclusive discounts and benefits
Republic Venture Opportunities for accredited investors
Republic Capital Multi-stage venture firm Republic Digital Crypto hedge fund
Wallet Manage your digital assets Mobile app Available on iOS or Android Learning center Explore investor resources FAQ Get your questions answered
Capital fundraising Raise on Republic Tokenized assets Design, launch, manage tokenized assets Sharedrops Gift equity as a reward
Advisory Access veteran web3 advisors Infrastructure Stake your digital assets Tokenization Deploy your assets on-chain Asset management Explore digital asset funds
Republic Capital In-house Venture Capital fund Broker dealer Regulated capital services
Log in Sign up

Republic Republic Republic
Oops! We couldn’t find any results...
Can’t find a deal? Try advanced search.
Is something missing? Add your suggestion here.
  • US
  • Log in
  • Sign up
All investors
Primary market Live deals Secondary market Buy and sell Republic Note Own a piece of Republic's upside Investor Network Membership Receive exclusive discounts and benefits
Accredited only
Republic Venture Opportunities for accredited investors
Institutional
Republic Capital Multi-stage venture firm Republic Digital Crypto hedge fund
More
Wallet Manage your digital assets Mobile app Available on iOS or Android Learning center Explore investor resources FAQ Get your questions answered
Spotlight deal
Eli Roth's The Horror Section (Reg D)
Eli Roth's The Horror Section (Reg D)
A brand-new independent studio from an iconic horror filmmaker
Growth capital solutions
Capital fundraising Raise on Republic Tokenized assets Design, launch, manage tokenized assets
Sharedrops Gift equity as a reward
Web3 services
Advisory Access veteran web3 advisors Infrastructure Stake your digital assets Tokenization Deploy your assets on-chain Asset management Explore digital asset funds
Institutional services
Republic Capital In-house Venture Capital fund
Broker dealer Regulated capital services
Journal

Investor education

· August 14, 2019

Unicorns are the rarest startups around

What are unicorns in the startup world, and how do you spot one in the wild?

  • Liked
    Like
    23
  • Comments (2)

There are a million and one startups in existence. Some will make it past startup status and become full-fledged, self-sufficient companies worth more than their initial value. Others will not and ultimately fail.

Yet a select few startups will do so well that they become worth over $1 Billion. These startups come once in a blue moon. Though you might be familiar with a few, achieving a valuation over $1 Billion is an incredibly rare feat.

That’s why these companies are called “unicorns.”

What’s a unicorn, and why does it matter?

Cowboy Ventures’ Aileen Lee originally coined the term “unicorn” in 2013. Lee originally used the term to describe statistically rare companies, as a startup has an estimated  .00006% chance of becoming a billion dollar company.

At the time, there were only 39 unicorns on the market. Today, there are over 490 unicorns around the world.

How does a company become a unicorn?

It’s all about their valuation. This can depend on the company’s past performances, growth opportunity, and overall market potential. 

For many startups, the billion-dollar valuation will come from funding rounds and receiving a sizable injection of cash from investors. It can also come through an acquisition. For instance, when Facebook bought Instagram for $1 Billion, Facebook gave Instagram the valuation to become an overnight unicorn.

How can you spot a unicorn?

Let’s repeat this again: a company has a .00006% chance of becoming a unicorn, or three out of every five million companies. So, yes, spotting one is hard, to put it mildly.

Not all unicorns are alike, though there are some common characteristics you can look for when searching for the next unicorn — if you can spot it, that is.

They are disruptive. Nearly all unicorns have disrupted their industry. For example, Airbnb redefined what it meant to book a hotel room. Netflix transformed how we rent videos. 

They often have a first mover advantage. Unicorns are often the first to market with their idea. They tend to maintain that first mover advantage by constantly innovating and expanding their product or service. 

Consider Facebook. They were the first to introduce an online network for college students, and since innovated and created new applications to grow their user base. 

They grow fast. Unicorns are constantly growing, so looking at user acquisition and the potential market can help investors spot a rising unicorn. Right before reaching unicorn status, Grammarly announced they had over seven million daily active users across devices. Less than a year later, Grammarly crossed the billion line.

At the same time, companies do not need to be the first to be a unicorn. Lyft, for example, was founded three years after Uber and is growing at a faster rate.

They attract big-time investors. One of the best indicators that a company is on track to becoming a unicorn is their investment history. Soon-to-be or “baby unicorns” tend to have a strong funding history, especially in their C and D fundraising rounds. 

They have strong executive leadership. For a unicorn to succeed, it needs strong leadership. This can make or break a company. In fact, many unicorns fail because of executive turnover or mismanagement. Evernote, for example, lost four of its top executives and has since struggled to maintain its status in Silicon Valley. It’s important to look for founders with experience in that industry and/or at scaling other successful companies.

Are unicorns really magic?

Not always. Reaching unicorn status does not equate success. In fact, there are many “zombicorns,” “unicorpses,” and “dead unicorns.” Flipboard, for instance, struggled to maintain valuation after acquisition talks with Twitter stalled, and is no longer considered a unicorn. Just because a company is called a unicorn doesn’t mean it will maintain its valuation.

After all, being a “unicorn” has a lot to do with hype and excitement placed on companies by investors or the media. Some companies struggle to keep up or easily burn through their investment money. Theranos is probably the best example of this. 

Even unicorns can experience down exits. The Honest Company actually raised a down round that dipped them below the $1 Billion mark, though they’ve since bounced back.

So why should we care about unicorns?

A true unicorn could present a fantastic investment opportunity, especially at an early stage. Uber, for example, made history for the biggest IPO fail in history. Yet the early investors ⁠—  the people who came in early with smaller amounts -- made millions. A small investment early on could yield a massive return if that unicorn succeeds.

When investing in a startup, you’re looking to make a return on your investment. By investing in a unicorn before it reaches unicorn status, you’re likely to make a significant return on your initial investment. If said unicorn goes public, you could even see your original investment multiply. To increase your possible return on investment, you want to invest in the startup as early as possible.

Yet investing in a unicorn is nearly as likely as finding an actual horned beast in the wild. If you invest carefully, do your research, and place careful investments in the right companies, there’s a chance you might find yourself owning part of a future unicorn.

Find startups on Republic


This educational article is provided by Republic to help its users understand this area of the market, it should not be construed as investment advice as it is impersonal, disinterested and was produced by Republic for Republic’s users, without remuneration received or expected.

Share this story

Read next

The #1 Place Where Private Wealth Allocations are Moving

Investor education

The #1 Place Where Private Wealth Allocations are Moving

76% of private wealth professionals and advisors say their clients view private markets as returning higher rewards than stocks and bonds.1  A new survey finds that one investment category sits at the top of private wealth managers’ plans for new all...

Timeworx.io: Transforming AI Development Through Decentralized Data Labeling

Crypto

Timeworx.io: Transforming AI Development Through Decentralized Data Labeling

-

Republic Joins Injective as a Validator

Crypto

Republic Joins Injective as a Validator

Powering Institutional-Grade DeFi and Tokenization

2 comments

Share feedback and comment below. Please note that this section is not monitored by Republic. If you have any questions please reach out to investors@republic.co

The comment you're trying to see no longer exists.

Profile picture of Martin Krins
Martin Krins
almost 6 years ago
Jumpstart, is about to change how we see and value the insurance we have to the ones we don’t,The ability to be paid quickly by being in the effective zone ,
0 Like Reply
Profile picture of Jerry Mooney
Jerry Mooney
almost 6 years ago
Is there any help For A Veteran With No Money To Put Up But With 15 Years In the Business And not Looking For Long Term (5) Years Maybe I Can Become A (Unicorn)
1 like Reply

Get notified about new posts

Not a valid email address
Republic

Giving everyone access to early-stage startup investing

For investors
  • Why invest
  • How it works
  • FAQ
  • Risks
  • Privacy policy
  • Accessibility
  • Cookie Preferences
  • Form CRS
For startups
  • Why raise
  • Learn
  • FAQ
  • Instruments
  • Crowd SAFE
  • Tokenized assets
Company
  • About
  • Journal
  • Events
  • Contact
  • We're hiring!
Dollar Refer a startup, get $2,500
Dollar Refer a startup, get $2,500

Invest in the app

Android app iOS app

Invest in the app

Android app iOS app

This site (the "Site") is owned and maintained by OpenDeal Inc., which is not a registered broker-dealer. OpenDeal Inc. does not give investment advice, endorsement, analysis or recommendations with respect to any securities. All securities listed here are being offered by, and all information included on this Site is the responsibility of, the applicable issuer of such securities. The intermediary facilitating the offering will be identified in such offering’s documentation.

All related securities activity is conducted by OpenDeal Broker LLC a registered broker-dealer, Member of FINRA and SiPC, an affiliate of OpenDeal Inc. and OpenDeal Portal LLC, located at 149 5th Avenue, 10th Floor, New York, NY 10010. Please check our background on FINRA’s BrokerCheck.

Certain pages discussing the mechanics and providing educational materials regarding regulation crowdfunding offerings may refer to OpenDeal Broker LLC and OpenDeal Portal LLC collectively as “Republic”, solely for explanatory purposes.

Neither OpenDeal Inc., OpenDeal Portal LLC nor OpenDeal Broker LLC make investment recommendations and no communication, through this Site, or in any other medium, should be construed as a recommendation for any security offered on or off this investment platform. Investment opportunities posted on this Site are private placements of securities that are not publicly traded, involve a high degree of risk, may lose value including the total loss of invested capital, are subject to holding period requirements and are intended for investors who do not need a liquid investment. Past performance is not indicative of future results. Investors must be able to afford the loss of their entire investment. Only qualified investors, who understand the risks of early-stage investment and who meet the Republic's investment criteria may invest. Investors may be restricted to only Accredited Investors or non-U.S. persons, to invest in offerings hosted by OpenDeal Broker. Neither OpenDeal Inc., OpenDeal Portal LLC nor OpenDeal Broker LLC, nor any of their officers, directors, agents and employees make any warranty, express or implied, of any kind whatsoever related to the adequacy, accuracy or completeness of any information on this Site or the use of information on this site. Offers to sell securities can only be made through official offering documents that contain important information about the investment and the issuers, including risks. Investors should carefully read the offering documents. Investors should conduct their own due diligence and are encouraged to consult with their tax, legal and financial advisors.

By accessing the Site and any pages thereof, you agree to be bound by the Terms of Use and Privacy Policy. Please also see OpenDeal Broker’s Business Continuity Plan and Additional Risk Disclosures. All issuers offering securities under regulation crowdfunding as hosted by OpenDeal Portal LLC are listed on the All Companies Page. The inclusion or exclusion of an issuer on the Platform Page and/or Republic’s Homepage, which includes offerings conducted under regulation crowdfunding as well as other exemptions from registration, is not based upon any endorsement or recommendation by OpenDeal Inc, OpenDeal Portal LLC, or OpenDeal Broker LLC, nor any of their affiliates, officers, directors, agents, and employees. Rather, issuers of securities may, in their sole discretion, opt-out of being listed on the Platform Page and Homepage.

Investors should verify any issuer information they consider important before making an investment.

Investments in private companies are particularly risky and may result in total loss of invested capital. Past performance of a security or a company does not guarantee future results or returns. Only investors who understand the risks of early stage investment and who meet the Republic's investment criteria may invest.

Neither OpenDeal Inc., OpenDeal Portal LLC nor OpenDeal Broker LLC verify information provided by companies on this Site and makes no assurance as to the completeness or accuracy of any such information. Additional information about companies fundraising on the Site can be found by searching the EDGAR database, or the offering documentation located on the Site when the offering does not require an EDGAR filing.

To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account. Therefore, when you use the Services we will ask for your name, address, date of birth, and other information that will allow us to identify you. We may also ask to see your driver's license, passport or other identifying documents.

Republic and its affiliates are not and do not operate or act as a bank. Certain banking services are provided by BitGo Trust Company, a South Dakota-chartered trust company and registered money services business. BitGo Trust Company is not an FDIC member. Digital (crypto) assets and investment products are not insured by the FDIC, may lose value, and are not deposits or other obligations of BitGo Trust Company and are not guaranteed by BitGo Trust Company. Terms and conditions apply.

Invest in startups using your credit card
You can invest using your credit card

Made in SF/NYC