The term unicorn was first coined by venture capitalist Aileen Lee, founder of CowboyVC, a seed stage venture capital fund based in Palo Alto, California. She saw the statistical rarity of such successful ventures and likened it to the mythical animal. A unicorn is a privately held start-up company with a value of over $1 billion. Fortune magazine has created a list with more than 100 entries of current unicorns. Ones that make the list include Uber, Airbnb, SpaceX, Palantir Technologies, WeWork, and Pinterest.
But how can you spot a unicorn in the making?
If we knew that, we wouldn’t be writing this article, we would be on a beach sipping margaritas. But, there are some trends that have been identified and some industries that seem to be successful at generating unicorns.
E-commerce marketplaces, robotic and AI driven industries seem to be a ripe bed for creating unicorns. Uber started the trend, and the most recent unicorn listed is Convoy a Seattle based freight distribution company.
Delivery companies also seem to be generating a large number of unicorns, with UberEATS and DoorDash, ubiquitous across many Canadian cities now.
In 2018, Fortnite helped Epic Games gain unicorn status. The progression of games not just for children has created a global market that, if it can be tapped into, can create a huge opportunity. The challenge is to maintain and sustain player interest and valuation.
Business Automation seems to be the next hotbed for opportunities.
You are looking for companies that are solving a significant problem with a disruptive solution. One of the other factors is having a strong culture, it ensures that everyone is rowing the boat in the same direction. FrontFundr as an online funding and investment marketplace enables you to see what motivates the founders and company, which can help to assess whether you want to invest in a company or not.
It’s also said that to be successful, a company needs forward-looking investors, that is where you come in. When it comes to investing on FrontFundr, we would say invest in companies that you believe in, with a story that resonates and within your risk tolerance.
Private companies are where the greatest rewards can be found, but also where the greatest risks are. But if you select wisely and spread your investments over multiple emerging companies, and the companies do well, you never know we may share in the success of a Canadian unicorn. Because there will likely be others that share the same view as you and widespread adoption is really the key to the growth of unicorns.
Join me on a Free webinar to know "How investing in private companies statistically is where the greatest returns are. How do you access them and what are the risks". The webinar starts at 9:00 AM PST on Wednesday, 6th March 2019. Don't forget to follow our page on Facebook and Twitter to know more about our upcoming events.