Unicorns are No Longer Rare, but Profitable Ones Are
Today I read another gem on Crunchbase about the term “Unicorn”.
The article was entitled “As the Term “Unicorn” Goes Broke From Overuse, What’s Actually Rare?” So low and behold it confirms what many of us who follow the finance industry and it’s connection to the funding of startups have known for awhile.
There are way too many “unicorns”! Given their ridiculously high valuations in the private markets, it’s remarkable how few of them are actually profitable.
The Term Unicorn Explained
Here’s one of the juicier insights from the article:
“Unicorn is now only useful as a valuation-descriptor. It no longer implies something rare.“
So, what we need is either a redefinition of “unicorn” or to stop over using it. Perhaps we need an entirely new concept to define a rare occurrence.
But regardless whether we change up what unicorn itself means, or invent a new word, the ultimate goal is that we need a way to tease out the exceptional companies from the merely very good.
Profit is what really makes you rare. Not just a high valuation. There’s enough money flying around to print the latter by the dozen. Earning the former? Now’s that’s legendary and hard to find.
Just like a unicorn.”
Enough said.
Ray Burrasca is the Executive Vice President and Chief Operating Officer of Archimedes’ Offspring, an unincorporated “umbrella” organization whose mission is to make “reasonable returns investing” affordable for the ordinary Joe’s and Jane’s and, in the process, to reinvent innovation in America. He can be reached at ray@archimedesoffspring.com or by phone at (303) 910-2344.
