Love Ventures’ Post

A brief look at Aileen Lee Allegra Simon of Cowboy Ventures akeaways about the 532 companies in the 2023 🦄 Unicorn Club: The number of unicorns ballooned 14x in the past decade The pendulum swung hard to enterprise, with 78% of unicorns today focused on B2B, the inverse of 2013. Still, it’s a wobbly, bloated herd that will thin in the coming years (likely to about 350) There have been very few exits. Only 7% (35 companies) versus 66% a decade ago. Capital efficiency declined significantly. This will be bad for exits, venture returns, founders and employees. OpenAI will likely be the first superunicorn of the decade, and AI likely the mega-trend. The Bay Area was home to more unicorns this time around but lost share as other hubs grew. More unicorns means more founders, but some things didn’t change at all. Diversity is still wanted, and there’s a lot of opportunity to improve the composition of founding teams. If the past is a prologue, expect a mixed outlook for the current herd and many more unicorns in the future. https://lnkd.in/gr9CT46E

Unicorn Status? Cowboy Ventures found just 39 unicorns out of thousands of startups funded. Some highlights: The majority (62%) had “exited” - gone public or been acquired. Most were consumer-oriented: ~80% of the value, ~60% of companies. Enterprise-oriented companies had great capital efficiency (26x), 2.4x better than consumer companies.2 One company in a decade became a “superunicorn” (worth >$100B): Facebook. Contrary to the prevailing stereotype, average age at founding was 34; 38 for enterprise software companies. Co-founding teams of 3 with common work, school and tech experience were the majority. The Bay Area was unicorn HQ (70%). NY, home to 3, was the second largest hub. There was very little diversity - no female CEOs, just 5% had a female co-founder.

The latest unicorn report from Aileen Lee and Cowboy Ventures is mindblowing. Although the number of unicorns increased from 39 to 352 in the last decade, there are some sobering takeaways in this data for founders. Turns out, being a unicorn isn't a good goal. First, remember not all unicorns are created equal. 93% of these companies are unicorns on paper ("papercorns") but there is not necessarily liquidity available yet as they are privately valued. If you try to get liquidity on the secondary market, 40% are trading at below $1B (so not unicorns after all). Another sobering takeaway? Achieve unicorn status too quickly and you can fail. "Fallen unicorns like Hopin and Bird were crowned within one year of founding; car leaser Fair in two years; Convoy and Knotel just three years after founding." Finally, a metric known as "capital efficiency" has plummeted. Capital efficiency is the ratio of valuation to money raised - the higher the better. This is a good reflection of how investors (and founders/employees) will do in terms of an eventual outcome. Enterprise company capital efficiency dropped from 26x to a lame 7x. What should founders do with this information? Focus on growing an efficient business for the best outcome. Don't worry at all about achieving a unicorn valuation on paper as that could mean you have to raise a lot of money to even get that valuation (you don't necessarily get valued until you take in cash). Instead focus on capital efficiency and building a huge business which will get the best returns for you, your employees and your investors. https://lnkd.in/gx6XZCDY

19 JANUARY 2024 UNICORNS! SUPER UNICORNS ARE REAL (OpenAI to be first!!) The Irrational Fund (IRR) Opportunity https://irr.mmm.page TECHCRUNCH, Eileen Lee of Cowboy Ventures; * The number of unicorns ballooned 14x in the past decade, from 39 to 532! They now serve a wider array of sectors (we’re tracking 19), from climate and crypto to vertical SaaS. * The pendulum swung hard to enterprise, with 78% of unicorns today focused on B2B, the inverse of 2013. * Still, it’s a wobbly, bloated herd that will thin in the coming years (likely to about 350) because … A whopping 93% are “papercorns”: privately valued companies. ________________ 60% are “ZIRPicorns”: Their last valuations were from 2020–2022, when interest rates were near zero, and many of these are running out of runway. ________________ Around 20% of unicorns are on the cusp, valued at just about $1 billion. Around 40% are trading at less than $1 billion in the secondary markets. BUT, there is lots of substance in this herd. And we see evidence of a Software Unicorn Power Law: The U.S. will be home to more than 1,000 unicorns by 2033. * There have been very few exits. Only 7% (35 companies) versus 66% a decade ago. Capital efficiency declined significantly. This will be bad for exits, venture returns, founders and employees. * OpenAI will likely be the first superunicorn of the decade, and AI likely the mega-trend. The Bay Area was home to more unicorns this time around but lost share as other hubs grew. More unicorns means more founders, but some things didn’t change at all. Diversity is still wanted, and there’s a lot of opportunity to improve the composition of founding teams. If the past is a prologue, expect a mixed outlook for the current herd and many more unicorns in the future.

A decade ago Aileen Lee, Partner at Cowboy Ventures coined the term #Unicorn with her article "Welcome to the Unicorn Club'. Yep -it's been 10 years. Check out her anniversary piece "Welcome back - 10 years later". As she observes the state of the #VC space, here are some of her observations & predictions: 1. In the last decade money into #VC exploded - but capital efficiency nose-dived (current valuation/ #capital raised) 2. 39 Unicorns in the US - 10 years ago; today 532. Today, 40% of them trade below $1 billion 3. More will shut down in '24 - investors remain weary 4. Going from startup to Unicorn too fast is not a good sign ==> read her article below - Happy Friday. #startups #startupstories Deepak ShahdadpuriVikas Aggarwal Deepak Natarajan Monisha Varadan Will Klippgen 威廉 Francisco Veloso Ziv Ragowsky Nicolas Sauvage Ian PotterJoachim Vandaele https://lnkd.in/dNcTyqVW

Welcome to the 532 companies in the 2023 Unicorn Club! A decade ago Aileen Lee & Allegra Simon had coined the term Unicorn 🦄 for private companies who were valued above ⬆️ a $1bn and since then founders and VCs have been obsessed with the term. Correction - even policymakers, commentators and all sorts of folks. The profound impact it’s had on the overall startup scene has been immense - can’t say all positive but it’s not the mistake of the folks who coined the term…. Here is their last blurb on the State of the Unicorn Nation at the end of 2023 which at the time of writing has 532 inhabitants (some who I suspect would lose their residency if they were to value themselves now). Here are some takeaways for, with deeper explanation in the article link 👇: 🦄 Unicorns ballooned 14x in the past decade, from 39 to 532! They now serve a wider array of sectors (we’re tracking 19) from climate and crypto to vertical SaaS. 🦄 The pendulum swung hard to enterprise (78%), the inverse of 2013. It’s a bloated herd that will thin in coming years (likely to about 350) because… 🦄 A whopping 93% are ‘Papercorns’ - privately valued companies. 60% are ‘ZIRPicorns’ - their last valuation is from ‘20-22, when interest rates were near zero. Many are running out of runway. 🦄 Many are on the cusp: 21% are valued just at $1B (sorry?!) 🦄 c40% are trading below $1B in secondary markets.4 BUT. There is lots of substance in this herd and they see evidence of a Software Unicorn Power Law 🦄 The US will be home to more than 1,000 unicorns by 2033 🦄 There’ve been very few exits - only 7% (35 companies) vs. 66% a decade ago. 🦄 Capital efficiency declined significantly. This will be bad for exits, venture returns, founders and employees. 🦄 OpenAI looks to be the 1st superunicorn of the decade, and AI likely the megatrend. 🦄 The Bay Area gained in #s but lost ground as Unicorn HQ while other hubs grew. 🦄 More unicorns and geos, more co-founders with diverse backgrounds - but some things didn’t change at all. 🦄 Diversity still wanted - still lots of opportunity to improve founding team composition. If past is prologue, expect a mixed outlook for the current herd, and many more unicorns in the future. Amir Nooriala Tammer Qaddumi Nabeel Koshak Kushal Shah Sopnendu Mohanty Ron Shevlin Jason Mikula Efi Pylarinou Marcel van Oost Simon Taylor Sam Boboev Nicolas Pinto Mohamed Roushdy, MBA Vijay Shekhar Sharma Madhusudanan R #unicorns #fintech #saas #openai #valuations

🦄 Really enjoyed pouring over Aileen Lee & Cowboy Ventures's lookback on the Unicorn Club! A few key highlights: 👋🏽 Diversity wanted– in the last decade, co-founder geographies, educational, and work backgrounds have all diversified! 14% of unicorns have a female co-founder; the Bay Area is home to 45% of unicorns, and NY grew to 19%; and only 20% of founders went to a Top 10 school 📈 Capital efficiency is key– enterprise company capital efficiency fell from 26x to 7x… startups will need to consider their valuations, burn rates, & margins that much more moving forward 🐻 Right-sizing makes sense– whether it’s a startup raising a right-size round or check writing in a more conscious way, it’s critical to reconsider in the wake of VC’s wild 2020-2022 era https://lnkd.in/dMwzqcyr

Even now, after 10 years, the highly valued startups known as unicorns still capture our interest. They are a super elite club whose founders keynote at the best events and whose every step (and misstep) is chronicled by journalists and on social media.    This week marks the decade anniversary of the analysis done by VC Aileen Lee of Cowboy Ventures that created the concept of the #unicorn - a #startup company less than 10 years old  that is valued at $1B or more. (https://lnkd.in/etSG5fPd) In that cohort, there were 39 unicorns with Facebook owning the highest valuation and earning the first ever super unicorn designation.   Lee has updated her analysis on the status of unicorns. The 2023 Unicorn Club has grown to 532 companies, a 14X increase with an aggregate valuation of $1.5T compared to $260B in 2013. Today's super unicorn is OpenAI.   This growth is only one of the significant trends impacting unicorns and, in some cases, the overall startup ecosystem. More insights are available in the updated report titled "Welcome Back to the Unicorn Club, 10 Years Later," on the Cowboy Ventures website: https://lnkd.in/ePJFRKqg

Aileen Lee, the founder and managing partner of the VC fund, Cowboy Ventures, coined the term “Unicorn” in 2013, describing start-ups who are younger than 10 years with a valuation of more than $1Billion. Now, she and Allegra Simon have looked at the changed landscape of the Unicorn universe and just published a fascinating report of what has changed over the last 10 years. Key highlights of this important research are: -      US-based unicorns grew 14x from 2013 to now - from 39 to 532! Today’s unicorns are more diverse in regard to industry sectors, geographic distributions with a more diverse founder background, too. The Bay Area lost significant ground as the key geographic hub for Unicorns with a share drop from 69% to 45% -      Today, 80% of Unicorns are focused on enterprise solutions whereas it was an 80% focus on consumer market in 2013 -      The return on investment dropped significantly since the capital efficiency went from 26x to 7x today. -      Most of the today’s unicorns are privately valued (93%), meaning their valuation could significantly change before a liquidity event occurs, either a sale or an IPO. -      More than 50% of today’s Unicorns raised their capital when interest rates were almost zero. Aileen calls them “ZIRPicorns". -      There have been very few exits, only 7% versus 66% a decade ago but OpenAI looks to be the first “Superunicorn” of the decade with a value of over $100Billion. -      The research looked at now 1,300+ founders with some key structural insights: 83% of today’s founders have cofounders; their average age at founding was 35;70% of founders worked previously in tech; 65% of founders went to school or worked together (a significant decrease from 90% in 2013). Only 20% of founders went to a “Top 10” school versus over 60% ten years ago with no school having more than a 5% share (Stanford University still leads but dropped its share from 13% to 5%). -      The research shows some progress in gender diversity but still with massive growth opportunities: 14% have now a female founder, up from 5% with 5% having a female founding CEO up from 0%. Sadly, the data didn’t provide any insights in regard to ethnicity, since most data sources doesn’t track this dimension, clearly a massive opportunity to build a better base line to track future progress.   Thank you Aileen and Allegra for this incredibly insightful report. Please read the full report here:

Index Ventures announces $2.3 billion in new venture and growth funds #IndexVentures has just announced a significant milestone, unveiling $2.3 billion in new funds, which includes an $800 million #VC fund and a $1.5 billion growth fund. This new injection of capital brings the total amount raised by Index since its founding to an impressive $15 billion. Founded nearly three decades ago, Index Ventures has been instrumental in the success of 108 companies that have reached valuations of $1 billion or more, with 23 surpassing $10 billion, and 57 becoming publicly traded. Their portfolio companies, including prominent names like Figma, Revolut, Roblox, Scale AI, and Wiz, have collectively created over 200,000 jobs, with plans to add 20,000 more in the coming year. The firm’s new funds will enable it to continue partnering with transformative startups across the globe. With a strong presence in key innovation hubs from San Francisco to Tel Aviv, and a new office in New York, Index Ventures is well-positioned to support category leaders and emerging startups alike. Shardul Shah, a partner at Index Ventures, highlighted the transformative potential of AI, stating that it will revolutionize virtually every sector of the economy. This new era presents unique opportunities to solve some of the world's most challenging problems, and Index Ventures is excited to partner with entrepreneurs to drive this change. The article on Yahoo Finance in the first comment. Want to stay up to date with the market? Here my newsletter: - Linkedin: https://lnkd.in/d4h8zqKA  - Substack: https://lnkd.in/dzfGJzmW