A unicorn is a privately held company valued at more than $1 billion. In venture capital, that valuation is not just a trophy: it can be the scale required to produce the fund returns investors seek. section 9.2
Why investors look for unicorns
Imagine a fund investing $20 million in one startup—$10 million initially and $10 million later. To achieve the required portfolio returns, the firm may need that investment to become a unicorn. If investors cannot see a path to a $1 billion exit within the fund’s usual time limit, they may quickly decline. section 9.2
Use the definition as a fundraising filter:
- Match your investor list to your current round, fund size, and investment stage. section 9.2
- Build relationships with firms that invest in the next stage before you need them. section 9.2
