Unicorn (finance)

[8] During the mid-2000s, investors and venture capital firms were adopting first-mover advantage and get big fast (GBF) strategies for startups, also known by the neologism, "blitzscaling".

[17] GBF is a strategy where a startup tries to expand at a high rate through large funding rounds and price cutting to gain an advantage on market share and push away rival competitors as fast as possible.

[18] The rapid returns through this strategy seem to be attractive to all parties involved, despite the cautionary note of the dot-com bubble of 2000, as well as a lack of long-term sustainability in value creation of emerging companies of the Internet age.

With the advent of social media and access to millions utilizing this technology to gain massive economies of scale, startups have the ability to expand their business faster than ever.

[25] Valuations for unicorns usually result from funding rounds of large venture capital firms investing in a start-up company.

[31] Similarly, in 2015 William Danoff, who manages the Fidelity Contrafund, said unicorns might be "going to lose a bit of luster" due to their more frequent occurrence and several cases of their stock price being devalued.

[35] To give such high valuations in funding rounds, venture capital firms have to believe in the vision of both the entrepreneur and the company as a whole.

To properly judge the valuation of a company after the revenue forecast is completed, a forecast of the operating margin, analysis of needed capital investments, and return on invested capital needs to be completed to judge the growth and potential return to investors of a company.

Venture capitalists know the payout on their investment will not be realized for another five to ten years, and they want to make sure from the start that financial forecasts are realistic.

Competitor financials and past transactions also play an important part when providing a basis for valuing a startup and finding a correct valuation for these companies.

This trend of sharing resources has made three of the top five largest unicorns (Uber, DiDi, and Airbnb) become the most valuable startups in the world.

[39] E-commerce and the innovation of the online marketplace have been slowly taking over the needs for physical locations of store brands.

[40] The emergence of e-commerce companies like Amazon and Alibaba (both unicorns before they went public) has decreased the need for physical locations to buy consumer goods.

[41] In support of the sharing economy, unicorns and successful startups have built an operating model defined as "network orchestrators".

For example, an economic policy focus on enabling more unicorns, as the European Union is striving to do,[59] threatens to lose sight of other societally desirable forms of entrepreneurship.

Delivery robot company Starship Technologies is an Estonian unicorn.
Self-driving truck manufacturer Einride is a Swedish unicorn.
Hypercar manufacturer and EV technology developer Rimac Automobili is a Croatian unicorn.
Payment provider Adyen is a Dutch decacorn .
Spacecraft manufacturer SpaceX is an American centicorn.