Published 10 August 2017 Category: Business, Entrepreneurs, Startups, Leisure

Interesting Finds on Billion Dollar Startups

There’s a term that’s becoming commonplace in the business community. The term is “unicorn” and it’s used to describe startups that are still privately held and are valued at over a billion dollars.

In the venture capital (VC) world, a unicorn is a term for a technology start-up which has achieved a valuation of $1bn or higher on the back of fundraising. First coined by VC and seed investor Aileen Lee of Cowboy Ventures in her 2013 article Welcome To The Unicorn Club, the phrase is now widely used by journalists, funds, and start-up businesses.

How do you build a company that brings in more than a billion dollars?
There are many factors that can contribute to the creation of a “unicorn.” A hardworking team, supportive investors and mentors, identifying an untapped corner of the market and a keen understanding of what your customer base wants can contribute to future success at this high level.

Sage, a company that makes cloud accounting software for small businesses, released a study exploring the commonalities between the founders that get to this major business milestone. Read on for some of the research’s most intriguing findings.

1. 94% of the unicorn founders are men. 6% are women.

2. Stanford, Harvard and University of California are the top three alma maters of unicorn founders.

3. California is home to the most unicorn companies. New York has the second highest and the third jumps overseas to Beijing.

4. In Europe, London is the city with the most billion-dollar companies. Berlin is number two and Stockholm three.

5. 67% of the companies were launched by co-founders.

6. 37% were started by only one founder.

7. 60% of the founders who reached the billion-dollar mark are first time founders. 23% of founders are on their second attempt.

8. The people who have launched companies before receive higher valuations on their companies than first timers, an average of $5.88 billion compared to $4.29 billion.

9. The top three industries with the most unicorns are consumer internet, software and ecommerce.

10. The industries with the top valuations are slightly different. Consumer internet is still at the top. Those companies have a combined value of nearly $319 billion. But financial services is at number two with a combined value of more than $132 billion. Ecommerce is number three. Those unicorns have a combined value of nearly $125 billion.

11. Twenty-nine companies holding their 10-year anniversaries this year are unicorns. 2007 is the year that yielded the most billion-dollar companies.

12. Thirty-five of the companies on the list were four years old when they achieved unicorn status.

13. In 2014, 58 companies became unicorns. In 2015, that shot up to 86, but in 2016, the number dropped to 41.

14. However, in 2016, Sage found that companies achieved unicorn status faster than any other year.

15. In 2017, China and the United States were neck and neck for the number of companies gaining unicorn status.

16. The top 10 most valued companies are evenly split between China and the United States.

17. The United States has 144 unicorns in total. China has 47 and India has 10.

18. One-hundred-fifty companies, the majority of the list, are valued between $1 billion and $2 billion. Sixteen businesses have a valuation of more than $10 billion.

19. Uber is the unicorn with the highest valuation, at $62,500,000,000.

20. There is only one company in the top 10 that was launched in the 1990s: Alibaba, at number five, started in 1999.

Fast Fact: What do Airbnb and Uber have in common, besides multibillion-dollar valuations?
None of them directly create the value that end users consume. These companies facilitate the exchange of value between users. Airbnb doesn’t own any real estate and Uber doesn’t own any taxi.

Everyone these days is running behind this one fancy word, Startup. Some are trying to solve a problem, some are looking out as the next opportunity to make some dollars and some are still wanna-preneurs. But, what does it take to take-off your startup to the money making machine? All successful businesses never thought about money at first, they were always focused on making the Quality product and hence creating an impact to more and more possible users.