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Unicorn is a term used in the venture capital industry to refer to a private startup with a valuation of $1billion.The term was first published in 2013, coined by venture capitalist Aileen Lee, choosing the mythical animal to represent the statistical rarity of such successful ventures. Unicorns with over $10 billion in valuation have been designated as “decacorn” companies. For private companies valued over 100 billion, such as SpaceX as of late 2021, the terms “centicorn” and “hectocorn” have been used.
As per data, there are 1183 unicorn companies all over the world as of July 2022, out of which 634 are from the united states, 174 in china and 69 in India. This includes decacorn and hectocorn companies.
Valuation methods
With the financial forecasts set, investors need to know what the company should be valued in the present day. This is where more established valuation methods become more relevant.
This includes the three most common valuation methods
Discounted cash flow analysis
DCF valuation is a method of estimating the current value of a company based on projected future cash flows adjusted for the time value of money.
Market comparable method
This is a form of stock valuation that refers to market indicators, also called extrinsic criteria (i.e. not related to economic fundamentals and account data, which are intrinsic criteria
Comparable transactions
In the context of mergers and acquisitions, it is one of the conventional methods to value a company for sale. The main approach of the method is to look at similar or comparable transactions where the acquisition target has a similar business model and similar client base to the company being evaluated.
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