Monday, 20 July 2015

An average of 8 billion dollar US-based technology companies were created each year between 2005 & 2013



"1) We found 84 U.S.-based companies belong to what we call the “unicorn club,” a jaw-dropping 115% increase from our last post. The increase is driven largely by “paper unicorns” – private companies that have not yet had a “liquidity event.” But, these companies are still a super-rarity: our list is just .14% of venture-backed consumer and enterprise tech startups.
2) On average, eight unicorns were born per year in the past decade (versus four in the 2003-2013 era). There’s not yet a super-unicorn ($100 billion-plus in value) born from the 2005-2015 decade, but there are now nine “decacorns” ($10 billion-plus in value), 3x our last post.
3) Consumer-oriented companies drive the majority of value in our set: more companies and higher average value per company. They raise a lot of private capital.
4) Enterprise-oriented companies are fewer and raise less private capital; and increased enterprise fundraising has reduced their return on private dollars raised.
5) In terms of business models, e-commerce companies drive the majority of value in our set, but have the lowest “capital efficiency.” Enterprise and audience companies have decreased in market share of our set, while SaaS companies have grown in market share significantly. We’ve also added a new category: Internet of Things/consumer electronics.
6) It’s a long journey, beyond vesting periods: it has taken ~7 years on average before a “liquidity event” for the 39% who have ‘exited’ – not including the 61% of our list that is still private. The capital efficiency of these “private unicorns” is surprisingly low, which will likely impact future returns for founders, investors and employees.
7) Take heart, “old people” of Silicon Valley: Companies with educated, tech-savvy, experienced 30-something, co-founding teams with history together have built the most successes. Twenty-something founders and successful pivots are the minority; dedicated CEOs who are able to scale their companies for the long haul are not.
8) San Francisco maintains dominance as the new epicenter of the Bay Area’s most valuable tech companies; cities like NYC and L.A. are growing in importance
9) Immigrants play a huge role in the founding and value creation of today’s tech companies.  We wonder how much more value could be created if it were easier to get a work visa.
10) There’s still too little diversity at the top. There is movement in a positive direction on gender from a zero base; and not enough data on race and other underrepresented groups."

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