Professor at Stanford | Bestselling Author | Innovation | Venture Capital & Private Equity
Most startups become unicorns between years 2-7 after their first funding round. There's a surprising number achieving it quickly: 78 companies in under a year and another 84 in their first full year. The complete journey to unicorn status, based on new research analyzing 1,955 US companies: • "Instant unicorns": 78 companies hit $1B in under a year (including ClickHouse) • Year 1: 84 more companies join the club (Vise) • Year 2: 119 companies (WeWork) • Year 3: 123 companies (Neuralink) • Year 4: 115 companies (Confluent) • Year 5: 132 companies peak (Databricks) • Year 6: 105 companies (Notion) • Year 7: 97 companies (MasterClass) • Year 8: 67 companies (SparkCognition) • 9+ years: 34 companies (Strava) What does this tell us about the startup journey? Building a billion-dollar company takes time – but perhaps not as much time as you might think. The data suggests that if you're going to reach unicorn status, it typically happens within the first 7 years after institutional backing. 📊 Note: Data covers 1,955 US-based VC-backed companies that became unicorns between 01/1997 and 07/2024 Thank you to the Stanford University Graduate School of Business Venture Capital Initiative for support.
What that data set may really tell us to start with is just a plain and simple reality check on billion-dollar dreams staying most often that: dreams. The “startup game” is about ….surviving the brutal odds? #StartupTruth #VentureCapital #EntrepreneurReality
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Thank you for continuing to share these stats Ilya Strebulaev! For most Founders/Start-ups the doubt starts seeping in by Year 3- What I’ve learnt is there must be different KPI’s along the way ( not just monetary ) to benchmark your goals & determine if you’re heading in the right direction. What you will find in most Caribbean Innovation incubators is a need to turn a profit within a year or two. Success is measured in monetary terms & there is a great pressure from the institutions that are backing these startups to produce a positive bottom line in the first 2-3 years. Most projects end up being shelved just before a breakthrough- data like this helps to remind us to be patient and understand there are other Key Indicators to determine success. Would love to get your take on what are some other indicators we should be measuring progress by outside of a positive bottom line?
Nice one to see
Interesting
How many of the 78 keep it after a year? I wonder if it lost as quickly as it is gained.
Insightful and thank you for sharing Ilya Strebulaev
Ilya Strebulaev It would be interesting to see how many of those ‘quick’ unicorns really manage a sustainable unicorn valuation also 3-7-10 years down the line and how many were a short-lived ‘shooting star’
Instant Unicorn 78 companies and 84 in year one! 😲 ... Never expected that! Year five seems to be the magic number! 3-5 is an expectation! 🤞 🍀 🤞
Professor at Stanford | Bestselling Author | Innovation | Venture Capital & Private Equity
3d⚡ We have also published a “What it takes to build a unicorn” report with all the facts and insights in one place It is based on research of 1,200+ US unicorns and includes data on the backgrounds of their founders, their paths to a billion-dollar valuation, and the role that VCs played in their success Aspiring to spot the next big thing or wondering if you've got what it takes to be a unicorn founder? Our data-driven report could be your guide! Support our research and access the full version on our Patreon: https://www.patreon.com/TheVentureMindset/shop/unicorn-report-466660 All of the profit is directed to further research efforts