A privately held startup valued at over one billion dollars. The name was chosen for rarity, and has aged badly.
Aileen Lee, 2 November 2013.
// Where it sits
A unicorn you can count in the thousands is a horse with good branding.
What it really means
Aileen Lee chose the word unicorn in 2013 for one reason: the thing she was describing was almost mythologically rare.
Her count: 39 US software companies founded since 2003 valued at a billion dollars or more — out of roughly 60,000 funded software and internet companies. That is 0.07%. One in 1,538.
By May 2024, the count was 1,248 worldwide.
A category with more than a thousand members is not a unicorn. It is a horse with good branding — and the escalating vocabulary that followed (decacorn above $10 billion, hectocorn above $100 billion) is itself the admission that the original threshold stopped carrying information.
Two findings from the original article are worth more than the word, and both cut against how the term is now used.
It took seven years on average to reach a liquidity event — extending beyond eight when still-private companies were included. The unicorn as an overnight event is a myth about a myth. Seven years is a long, unglamorous stretch during which nobody outside the company knows whether any of it is working.
And the value was grotesquely concentrated. Of the $260 billion aggregate value of all 39 companies, one — a single super-unicorn — accounted for almost half.
That second number is the one that should have travelled, because it changes what the category means. The unicorn club was not 39 comparable successes. It was one enormous outcome and 38 companies sharing the other half, which is roughly the shape of every venture portfolio ever assembled, and precisely the shape the word club conceals.
This page explains the terms and is not investment advice.
Where it comes from
The whole point of the word was SCARCITY: when Aileen Lee coined it in 2013, only 39 companies qualified.
Myths & misconceptions
Unicorns are vanishingly rare.
They were when named — 39 out of roughly 60,000 venture-backed software startups in 2013, about 0.07%, or one in 1,538. By May 2024 the count was 1,248 worldwide. The metaphor no longer holds, and the word survives only as a valuation threshold.
Unicorns become billion-dollar companies fast.
The original data showed SEVEN YEARS on average to a liquidity event, extending beyond eight when still-private companies were included. And the value was extraordinarily concentrated: exactly ONE company accounted for almost half of the $260 billion aggregate value of all 39.
Compare & contrast
Unicorn startup vs bootstrapping
Unicorn status is defined by an external valuation event. A bootstrapped company has no valuation to be measured by — which makes it invisible to this vocabulary entirely, regardless of how much money it makes.
| // | Unicorn startup | Bootstrapping |
|---|---|---|
| Defined by | Valuation | Ownership |
| Needs investors | Yes | No |
| Visible in the data | Highly | Barely |
| Timeline | ~7 years | Unbounded |
How it connects
- Burn Ratethe metric that governs the years before the valuation exists.
- Bootstrappingthe path this vocabulary cannot see.
Tell it apart
Questions people ask
- Who coined 'unicorn'?
- Aileen Lee, in a technology-industry article published 2 November 2013.
- How rare were they?
- 39 companies out of roughly 60,000 funded software startups — about 0.07%, or one in 1,538. That rarity is the entire reason for the name.
- What's a decacorn?
- A company valued above $10 billion; a hectocorn is above $100 billion. The escalating vocabulary is itself evidence that the original threshold stopped meaning anything.