Unicorns are a special category of well-funded startups that are privately owned and valued at over one billion dollars. Investopedia further explains that unicorns are “startups in the technology, mobile technology and information technology sectors.”
The term is attributed to Aileen Lee, founder of Cowboy Ventures. She first coined the phrase in her 2013 article, “Welcome to the Unicorn Club: Learning from Billion-Dollar Startups.”
There is an entire lexicon surrounding Unicorns, so we’ve compiled a list of definitions.
Unicorn Definitions:
Unicorn / Unicorn Status – Well-funded startups that are privately owned and valued at over one billion dollars. When a company hits this valuation, they are said to have achieved Unicorn Status.
Decacorns – a company valued at over $10 billion.
Super Unicorns (or Hectocorns) – Unicorns that are valued at over $100 billion dollars.
Unicorn Exits – When unicorns are acquired or go public.
Emerging Unicorns – Companies that are on their way or close to reaching Unicorn status.
The term Unicorn is a nod to the rarity of these startup companies, but they are becoming more and more prevalent each year. It is reported that there are currently over 400 Unicorns worldwide, with a combined valuation around $1.5 Trillion.
Here are a few examples of Unicorns:
- Robinhood, SoFi, Stripe (FinTech)
- Airbnb (Hospitality and Travel)
- Uber (Ridesharing, Transportation and Travel)
- Pinterest (Social Media Service)
- WeWork (Real Estate)
- DoorDash (Logistics, Food Delivery Service)
- Instacart (Retail, Grocery Delivery)
- Snowflake (Software, Cloud-based Data Warehousing)
As you can see, Unicorns span a variety of industries. Google, Microsoft and Facebook are some of the rare few who can claim Hectocorn or Super Unicorn status.
Venture Capital and Unicorn Companies
When investors or investment banks find a startup that they consider to have long-term growth potential, they invest in the startup with an agreement to be paid back with interest and/or company equity. Venture capital — or venture investing, another term used to describe this process — is a common form of funding for startups.
Eventually, startups may choose to go public through an initial public offering, or IPO, if they satisfy the public market thresholds. An IPO is the sale of stock in a private company to the public.
However, before a startup goes public, last-minute private funding may occur. This is called late-stage private capital fundraising (or a final private offering). Crossover investors bridge the gap between private and public investment markets. Often, startups that can obtain sufficient private funding before going public will be well-equipped for success.
How do Startups Become Unicorns?
Well-funded startups, and Unicorns in particular, are unique for a variety of reasons. It is inspiring to see startups not just “get by” but truly “make it” and become highly successful. Who doesn’t love a good business success story?
In fact, the process of a startup becoming a Unicorn is not far off from the process of a successful software development project. Here are three reasons why Unicorn startup company establishment parallels the software development process.
1. Unicorn Status Startups are Innovative
First, you need to start with an innovative idea. Innovative companies may meet an existing need in a new way, transform a process or break into new territory.
In the same way, a successful software development project starts with a fresh idea — something that hasn’t been done before or improves upon what currently exists in the market.
Now, innovation doesn’t mean you have to be flashy. Sometimes the best solutions are the ones that simplify a process, providing a seamless user experience (UX) through a minimalistic user interface (UI).
An attention-grabbing idea is extremely useful for brand awareness and securing capital but there is another quality of Unicorns that is worth mentioning.
2. Unicorns Embrace Digital Transformation
It’s no surprise that Unicorns fall under the technology, mobile technology and information technology sectors. Digital transformation is a key element to a successful startup; especially ones that are looking to hit Unicorn status.
Whatever this looks like in your industry — be it utilizing the latest technology, cloud computing or custom software solutions — you can stand out by embracing and staying abreast of the latest trends in digital technology.
3. Unicorns Look to Experts and Investors for Help
The third key quality of a Unicorn startup is that they look to experts and investors for help. Entrepreneurs know that what they provide is worth the investment. Whether the investment comes in the form of venture capital or advising services, expert help is crucial for both startup culture and software development success.
Successful entrepreneurs will have a natural perspective of their strengths and weaknesses, allowing them to seek out the help that they need. It is not uncommon for startups to have co-founders or partners, because it’s not easy — nor practical — to go it alone in the startup world. Outside advisors and investors provide expertise and resources that are often critical to a startup’s success.
You Too Can Experience Software Development Success
Just like venture investors, app and software development companies love working with clients who have an innovative idea, embrace digital transformation and are not afraid to look to others for the help they need to succeed.
One of our clients, Capital Works, came to 7T to build a capital transaction management platform that connects private businesses to growth strategies and exit options. The fintech platform allows capital providers to monitor investments and discover new opportunities while connecting businesses with advisors and access to capital.
At 7T, we love providing exceptional software development, consulting and data management services so that our clients can focus on transforming their ideas into reality.
If you are looking for mobile app, custom software development or software consulting services, reach out to the team at 7T. We can help your business develop a project strategy and software development plan that will lead to a winning ROI.
To discuss your development project, fill out the contact form below or call (214) 299-5100 to speak with our team today.
