What’s going to happen to unicorns?
A University of Chicago Booth School of Business faculty member writes about the start-up phenomenon in a new book.
In an excerpt from his new book titled Private Capital: The Complete Guide to Private Markets Investing, a University of Chicago Booth School of Business faculty member writes about the start-up phenomenon known as unicorns.
The article, titled “Death of the Unicorns . . . A Look at the Market for These Billion-Dollar Start-ups,” finds Stefan Hepp, an Adjunct Assistant Professor of Entrepreneurship, writing about the explosive growth of unicorns over a roughly six-year period. As of 2015, there were about 140 unicorns, and that increased to about 340 unicorns in 2018 before it exploded to more than 1,100 in 2021, when the unicorn phenomenon turned into a frenzy. According to Crunchbase, there were 168 unicorns that raised funding rounds of $1 billion or more between 2019 and the first half of 2021.
“Since then, the funding environment for start-ups has become much more difficult,” Hepp writes. “New funding rounds at valuations of $1 billion have become rare, while additional rounds for existing unicorns have often taken place at lower valuations. The real question, however, is how long this dry spell is going to last, as many unicorns have raised enough capital to survive until 2025. It will be interesting to see what happens once these companies, mostly unprofitable, need additional funding—and how many of those startups will maintain their unicorn status or even survive.”
Readers can find the article here.
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