Only 14% of venture capital firms backed unicorns with $1B exits - report

November 26
11:04 PM 2013

A report from CB Insights revealed that only a meager number of venture capital companies that are actively engaged in business have supported companies that have made USD 1 billion exits. Because they are so hard to come by, these startups are called by such names as unicorns and thunder lizards.

Since 2004, there were only 45 companies that have made such exits. However, an interesting fact as far as the venture capital industry is concerned is that these unicorns have received the financial backing of only 14% of active venture capital companies. Of that 14% only 3.5% have supported more than one unicorn.

The report also cited the blog of Andy Dunn who asked, "How many companies are in your portfolio that have reached $1 billion in enterprise value? If the answer isn't two, you are not good yet."

The companies included in the research are those were valued at USD 1 billion after they went public or after they were acquired. This was a different method than that used by others wherein the billion dollar funding valuations of these companies were included. The report said that there is no way of knowing how real those figures will be until the companies actually make the exit.

Although the report did not reveal the names of the 68 venture capital firms that have supported firms that made billion dollar exits in the past decade, it did give the names of the three firms that have invested in eight of these companies. These are Greylock Partners, Sequoia Capital and New Enterprise Associates.

Moreover, the report also said that concentrating merely on the investors of these unicorns does not give a full picture since those who don't invest in the early rounds also don't get the big returns. The report found that half of the total USD 24 billion dollars invested by Sequoia, Greylock and NEA were made in the Series B round or earlier.

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