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Unicorns Behavior in the MarketPlace: Research by Prof. Ilya Strebulaev at Stanford University, GSB

Reported by Aviva Lev-Ari, PhD, RN

The following observations are covered in a series of post by Prof. Strebulaev on LinkedIn:

1. How Long Does It Take for Unicorns to Exit?

Ilya Strebulaev posted this • 23h23h

How Long Does It Take for Unicorns to Exit?

For a sample of 396 exited US unicorns, it takes an average (median) of about 9 (8) years since founding to exit, where exit means going public, acquisition, or liquidation/bankruptcy.

There is a lot of variation, though. For example, some unicorns exited faster.  YouTube  was acquired by  Google  less than 2 years after founding, and  Allogene Therapeutics  went public in less than 2 years.  Some companies had to wait a long time.  AvidXchange, Inc.  went public in about 21 years, and  LinkedIn  acquired  Lynda.com  approximately 20 years after  Lynda.com ’s founding.

NB: Many unicorns in the sample have not yet exited, so both mean and median will eventually increase.

This research has been done with the help of the  Stanford University Graduate School of Business  Venture Capital Initiative.

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2. How Many Countries Have Produced Unicorn Founders?

Ilya Strebulaev posted this • 5d5d

How Many Countries Have Produced Unicorn Founders?

A couple weeks ago, I posted results of my research on the countries of birth of over a thousand founders of 500 US-based unicorns on LinkedIn. Almost half of unicorn founders, for whom my team and I were able to identify country of birth, were born outside the US. This generated a lot of interest and the list of top countries (India, Israel, Canada, UK, China, etc.) was shared widely.

As a follow up, have a look at all the countries that my team and I identified.

65 countries from all over the world have “produced” at least one founder of a US unicorn.

Takeaway: Immigrants from many countries contribute to the innovation ecosystem in the US.

European countries include Belgium (9 founders), Spain (9), Netherlands (7), Romania (5), Denmark (5), Italy (5), and Poland (5).

Asian countries include Iran (9), Lebanon (4), Japan (3), Pakistan (3), and Turkey (2).

African countries include South Africa (5) and Zimbabwe (2).

Latin America includes Brazil (9), Argentina (4), and Guatemala (2).

Australasia is represented by Australia (8) and New Zealand (6).

Important note: This list includes only founders of US-based unicorns.

This research has been done with the help of the  Stanford University Graduate School of Business  Venture Capital Initiative.

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. 3.    What are Unicorn Valuations at Their Exit Times?

Ilya Strebulaev posted this • 1w1w

What are Unicorn Valuations at Their Exit Times?

For a sample of 531 US unicorns, 396 had exited (went public, were acquired, or closed) as of January 2022. At exit time, an average (median) unicorn was valued at $4 billion ($1.6 billion). Half had a valuation of less than $2 billion.

50 unicorns, or 13%, had a valuation below $1 billion. For example,  Casper  and  Reata Pharmaceuticals, Inc.  had a net IPO valuation of $375 million and $176 million, respectively, while  LivingSocial  was acquired for virtually nothing.

31 unicorns, or 8%, were in the “decacorn” range at time of exit, or over $10 billion.  Uber  was valued at about $68 billion,  Meta  at $65 billion, and  Coinbase  at $48 billion.

Takeaway: There is huge variation in unicorn valuations at exit time.

This research has been done with the support of  Stanford University Graduate School of Business  Venture Capital Initiative. NB: For public companies, I used net IPO valuation; for acquired/closed companies, I used gross valuation.

hashtag#unicorns   hashtag#startups   hashtag#venturecapital   hashtag#valuation   hashtag#ipo   hashtag#acquisition…show more

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4. Who is Acquiring Unicorns?

Ilya Strebulaev posted this • 1w1w

Who is Acquiring Unicorns?

For a sample of 396 exited US unicorns, 135 companies (34%) were acquired.

The majority of these acquirers are public companies, responsible for 105 (78%) of all unicorn acquisitions. 18 (23%) of these public companies acquired two or more unicorns.  Cisco  bought five unicorns, including  Duo Security , Cerent, and  AppDynamics .  Alphabet Inc.  purchased four unicorns:  YouTube ,  Nest Labs ,  Actifio , and  Looker .  Meta  acquired  Oculus VR ,  Instagram ,  WhatsApp , and  CTRL-labs .

Of these public acquirers, 56 (75%) are based in the U.S. There are five acquirers from the U.K., three from Canada, and three from Switzerland.

Two private equity funds,  Thoma Bravo  and  Vista Equity Partners , acquired two unicorns each.

Takeaway: Many large companies are actively acquiring unicorns (among other VC-backed companies, of course).

This research has been done with the help of the  Stanford University Graduate School of Business  Venture Capital Initiative.

hashtag#unicorns   hashtag#startups   hashtag#venturecapital   hashtag#acquisitions…show more

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SOURCE

https://www.linkedin.com/in/ilyavcandpe/