Welcome To The Unicorn Club, 2015: Learning From Billion-Dollar Companies

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techcrunch.com – Many entrepreneurs, and the venture investors who support them, try to build big, impactful companies valued at a billion dollars and even more. These companies are called “unicorns” because what they had managed seemed unachievable, rare, or unconcievable.

That billion-dollar threshold is important, because historically, top venture funds have driven returns from their ownership in just a few companies that grow to be super-successful. And as most traditional funds have grown in size, they require larger “exits” to deliver acceptable returns.

For example, to return just the initial capital of a $400 million venture fund, an investor should own 20% of two different $1 billion companies at exit, or 20% of a $2 billion company when the company is acquired or goes public.

Read about what the analysis of billion dollar companies revealed at techcrunch.com

 

photo CC by Lemon~art

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