{"id":2754,"date":"2021-10-16T23:55:00","date_gmt":"2021-10-16T15:55:00","guid":{"rendered":"https:\/\/www.granitefirm.com\/blog\/us\/?p=2754"},"modified":"2025-06-09T11:39:27","modified_gmt":"2025-06-09T03:39:27","slug":"venture-capital-unicorns","status":"publish","type":"post","link":"https:\/\/www.granitefirm.com\/blog\/us\/2021\/10\/16\/venture-capital-unicorns\/","title":{"rendered":"Venture capital and unicorns introduction"},"content":{"rendered":"\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #ffffff;color:#ffffff\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #ffffff;color:#ffffff\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/10\/16\/venture-capital-unicorns\/#What_is_a_unicorn\" >What is a unicorn?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/10\/16\/venture-capital-unicorns\/#Why_unicorn_matters\" >Why unicorn matters?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/10\/16\/venture-capital-unicorns\/#Why_venture_capital_matters\" >Why venture capital matters?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/10\/16\/venture-capital-unicorns\/#Common_myths_about_unicorns_and_venture_capital\" >Common myths about unicorns and venture capital<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/10\/16\/venture-capital-unicorns\/#Venture_capital_in_a_sentense\" >Venture capital in a sentense<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/10\/16\/venture-capital-unicorns\/#Book_recommended\" >Book recommended<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/10\/16\/venture-capital-unicorns\/#Related_articles\" >Related articles<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading has-medium-font-size\"><span class=\"ez-toc-section\" id=\"What_is_a_unicorn\"><\/span><strong>What is a unicorn?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Although this term has actually existed for about 20 years, as far as I can remember, most people in the investment world did not pay attention to the term unicorn at least before the <a href=\"https:\/\/www.investopedia.com\/articles\/economics\/09\/financial-crisis-review.asp\" target=\"_blank\" rel=\"noreferrer noopener\">financial turmoil in 2008<\/a>. However, in the past ten years, it has gradually occupied all the financial and economic pages, and it has become widely known with the help of Wall Street. Now anyone who cares about financial news almost knows that unicorns are companies with a valuation of more than one billion US dollars. But recently, a new term has appeared Decacorn, which means it is a company with a valuation of more than 10 billion US dollars.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\"><span class=\"ez-toc-section\" id=\"Why_unicorn_matters\"><\/span><strong>Why unicorn matters<\/strong>?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In the past two decades, all the companies in the technology industry that you and I have known, including Alphabet (ticker:s: GOOGL and GOOG) and Facebook (ticker: META), have almost all evolved from unicorns. If there is no unicorn, there would not be a bunch of well-known listed technology companies now.<\/p>\n\n\n\n<p>As long as unicorns do not go bankrupt and survive, they will be listed. Because early investors, without exception, would hope that the unicorns will be listed as soon as possible, so that they can exchange their investment profits for cash to cash out early, and then make the money that has been made several times or tens or hundreds of times (hundred times or more return is harder, but it\u2019s not uncommon) to invest &#8220;more&#8221; on younger unicorns.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\"><span class=\"ez-toc-section\" id=\"Why_venture_capital_matters\"><\/span><strong>Why venture capital matters?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Venture capital is not a new term, it has existed for at least 20-30 years. However, after the 2008 financial tsunami, traditional banks or conventional loan channels are hardly the default financing channels for technology startups. There are many reasons, but I have at least the following points to share:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>It is impossible for banks to lend money to companies that cannot provide collateral. Technology startups, especially software companies in a broad sense (most valuable technology companies fall into this category), the only asset is high-paid engineers (This is a liability in the eyes of the bank) and laptops (under the general accounting principles, the value of depreciation after three years is zero).<\/li>\n\n\n\n<li>General banks will not lend money to companies in a loss. But let&#8217;s not say that startups are profitable. Most startups still have zero revenue. For example, most of the electric car factories, although many of these electric car companies are listed companies with extremely high market capitalization.<\/li>\n\n\n\n<li>Banks will require companies that apply for loans to submit repayment plans, but most startup companies can&#8217;t even compile financial reports, so the repayment plans come.<\/li>\n<\/ul>\n\n\n\n<p>Because it is impossible, and because of market needs, the so-called venture capital industry has emerged.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\"><span class=\"ez-toc-section\" id=\"Common_myths_about_unicorns_and_venture_capital\"><\/span><strong>Common myths about unicorns and venture capital<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Most people have too many myths about unicorns and venture capital as below:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The return is very high: if successful, the return on investment is indeed much higher than that of the stock market investment, not in terms of percentages, but in multiples or even exponential. But don&#8217;t forget, almost all venture capital investments ended in failure.<\/li>\n\n\n\n<li>The investment risk of venture capital is very high, and most of them end in failure. It is generally recognized that the probability of capital being squandered is more than 99%. Unlike investing in the stock market, no matter how bad it is, most of them can stop losses and get some money back; but this is impossible in the venture capital industry.<\/li>\n\n\n\n<li>Quick money is easy to make: a big mistake, most venture capital investment must be locked for at least five years, ten years is a very common period, is a typical long-term investment.<\/li>\n\n\n\n<li>I also want to enter, where is the way? Even if the average investor can find a way, 99.99% will be negative, because the entry price of venture capital capital starts at millions of U.S. dollars. So if you are a retail investor, I advise you to bypass early!<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\"><span class=\"ez-toc-section\" id=\"Venture_capital_in_a_sentense\"><\/span><strong>Venture capital in a sentense<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The so-called venture capital is a very risky investment, and the extremely hight return can only be made from extremely low 1% from their investment targets.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"180\" height=\"120\" src=\"https:\/\/www.granitefirm.com\/blog\/us\/wp-content\/uploads\/sites\/2\/2022\/09\/Flickr-1600x1200-6.jpg\" alt=\"venture capital\" class=\"wp-image-13993\"\/><figcaption class=\"wp-element-caption\">credit: Flickr<\/figcaption><\/figure>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\"><span class=\"ez-toc-section\" id=\"Book_recommended\"><\/span><strong>Book recommended<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Recommend friends who are interested in this topic, please refer to my other related article &#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/06\/06\/zero-to-one\/\">Zero to One<\/a>&#8220;, this book is especially legend on startup, venture capital and unicorns.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Related_articles\"><\/span>Related articles<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The following is an overview of the development of new innovative technologies in some important countries in my blog, or brief articles:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/06\/24\/traitorous-eight\/\">Traitorous Eight, the origin of the semiconductor and venture capital industries<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/06\/08\/secrets-of-sand-hill-road\/\">a16z&#8217;s &#8220;Secrets of sand hill road&#8221; to investors and entrepreneurs<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/04\/29\/y-combinator\/\">How is Y Combinator different from other venture capital firms?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/11\/11\/blitzscaling\/\">&#8220;Blitzscaling&#8221; expansion speed decide if startup success eventually<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/07\/26\/startup-issues-people-care\/\" target=\"_blank\" rel=\"noreferrer noopener\">Startup issues that most people care about<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/10\/24\/angel\/\" target=\"_blank\" rel=\"noreferrer noopener\">Angel is an excellent venture capital  book for ordinary people<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/06\/08\/essays-by-marc-anderson\/\" target=\"_blank\" rel=\"noreferrer noopener\">Two famous essays by Marc Anderson on software and artificial intelligence<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/05\/29\/don-valentine-sequoia\/\" target=\"_blank\" rel=\"noreferrer noopener\">Don Valentine, founder of Sequoia Capital, father of Silicon Valley Venture Capital<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/08\/09\/the-power-law\/\">The Power Law<\/a>&#8220;<\/li>\n\n\n\n<li> &#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/06\/06\/zero-to-one\/\">Zero to One<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/10\/16\/venture-capital-unicorns\/\" target=\"_blank\" rel=\"noreferrer noopener\">Venture capital and unicorns introduction<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/02\/17\/venture-capital-and-unicorn\/\" target=\"_blank\" rel=\"noreferrer noopener\">Global Venture Capital and Unicorn Report<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/wp-admin\/post.php?post=2818&amp;action=edit\"><\/a><a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/10\/18\/lets-talk-about-tiktok\/\">Let&#8217;s talk about TikTok <\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/06\/19\/failed-taiwan-software-industry-policy\/\" target=\"_blank\" rel=\"noreferrer noopener\">Failed Taiwan Software Industry Policy<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/06\/14\/china-and-us-gap\/\" target=\"_blank\" rel=\"noreferrer noopener\">The hardware and software gap between China and US, is all China-made software and hardware possible?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/04\/01\/japan-is-already-a-country-of-mediocrity-not-as-advanced-as-you-think\/\" target=\"_blank\" rel=\"noreferrer noopener\">Japan is already a country of mediocrity, not as advanced as you think<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/05\/26\/south-koreas\/\" target=\"_blank\" rel=\"noreferrer noopener\">South Korea\u2019s emerging technology giant<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/09\/28\/israels-venture-capital\/\" target=\"_blank\" rel=\"noreferrer noopener\">Beyond your imagination of Israel&#8217;s strong venture capital and tech strength<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/11\/10\/israels-technology-nation\/\" target=\"_blank\" rel=\"noreferrer noopener\">Reasons of the success Israel&#8217;s technology nation<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/10\/04\/israeli-stock-market\/\" target=\"_blank\" rel=\"noreferrer noopener\">Israel stock market and tech giants<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/10\/12\/india-stock-and-tech-giant\/\" target=\"_blank\" rel=\"noreferrer noopener\">Booming India stock market and the emerging Indian tech giants<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/?s=Indians+do+well+in+the+US%2C+India%E2%80%99s+weak+and+uncompetitive+industries\" target=\"_blank\" rel=\"noreferrer noopener\">Indians do well in the US, India\u2019s weak and uncompetitive industries<\/a><\/li>\n<\/ul>\n\n\n\n<p><em><strong>Disclaimer<\/strong><\/em><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><em>The content of this site is the author\u2019s personal opinions and is for reference only. I am not responsible for the correctness, opinions, and immediacy of the content and information of the article. Readers must make their own judgments.<\/em><\/li>\n\n\n\n<li><em>I shall not be liable for any damages or other legal liabilities for the direct or indirect losses caused by the readers&#8217; direct or indirect reliance on and reference to the information on this site, or all the responsibilities arising therefrom, as a result of any investment behavior.<\/em><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Introduction to venture capital and unicorns, Although this term has actually existed for about 20 years, as far as I can remember, most people in the investment world did not pay attention to the term unicorn at least before the financial turmoil in 2008.<\/p>\n","protected":false},"author":1,"featured_media":13993,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[85,65,8,83],"tags":[97,95,562],"class_list":["post-2754","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-venture-capital","category-business-books","category-investing-books","category-startup","tag-goog","tag-googl","tag-mvrs"],"_links":{"self":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts\/2754","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/comments?post=2754"}],"version-history":[{"count":26,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts\/2754\/revisions"}],"predecessor-version":[{"id":36978,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts\/2754\/revisions\/36978"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/media\/13993"}],"wp:attachment":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/media?parent=2754"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/categories?post=2754"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/tags?post=2754"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}