Unicorn
A privately held startup valued at $1 billion or more.
A unicorn is any private, venture-backed company that has reached a valuation of $1 billion or higher in its most recent financing round. The term was coined in 2013 to reflect how rare such companies were at the time; it's since become far more common, particularly during periods of abundant late-stage capital.
Unicorn status is based on the paper valuation set by the latest priced funding round, not an independent market valuation, meaning it can be significantly higher or lower than what the company would actually be worth if it went public or sold — a distinction that matters a lot when comparing unicorn counts across different funding-market conditions.
The term comes from Aileen Lee, founder of Cowboy Ventures, in a November 2013 TechCrunch essay titled 'Welcome To The Unicorn Club.' Her definition was narrower than today's — U.S.-based software companies started since 2003 and valued at over $1 billion — and she counted 39 of them, which she estimated at about 0.07% of venture-backed consumer and enterprise software startups. The same essay used 'super-unicorn' for companies worth more than $100 billion.
Unicorn counts vary a lot by tracker because methodologies differ: whether to count only venture-backed companies, how to treat valuations set in secondary transactions, and when to remove companies that go public or get acquired. Always name the tracker and the date when you quote a count, and compare within one tracker over time rather than across trackers.
A $1 billion headline valuation also doesn't mean common shareholders see $1 billion of value. Liquidation preferences on the preferred stock sit ahead of common at exit, so employees and founders can receive far less than the headline implies if the company sells below or near its last price.
Treat unicorn status as a fundraising milestone, not a business outcome — a company's private valuation is only proven real once there's an actual liquidity event, and plenty of former unicorns have seen that paper valuation not hold up at exit.
Does becoming a unicorn mean a company is actually worth $1 billion?
It means the company's most recent private funding round was priced at a $1B+ valuation, which is a negotiated, paper figure that may or may not hold up if the company later goes public or is acquired.
Who coined the term unicorn for startups?
Aileen Lee of Cowboy Ventures, in a TechCrunch essay published November 2, 2013. She counted 39 U.S.-based software companies started since 2003 and valued at over $1 billion.
What's bigger than a unicorn?
A decacorn, at $10 billion or more, then a hectocorn above $100 billion — the tier Aileen Lee's 2013 essay called a super-unicorn.
Why do unicorn counts differ between sources?
Each tracker uses its own rules on which companies qualify, which valuations count, and when exited companies drop off the list, so the same date can produce counts hundreds apart. Quote the tracker with the number.
Sources
Related terms
Run the numbers yourself: dilution, SAFE conversion, and fund-returner calculators.