The entrepreneurship zoo (1)

In summer days, when the heat intensifies and people enjoy their well-deserved holidays, it is common to make the most of our free time reading some articles or books that have been left aside during the rest of the year.

This August, among the different articles selected by Fellow Funders members to enjoy their free time, there were a series of articles that particularly caught their attention. Those articles referred to what Fellow Funders called: the entrepreneurship Zoo. In other words, the trend of naming different types of Startups and/or companies after animals, real or mythological. In previous blog posts,  something was already mentioned about unicorns, cockroaches, gazelles, camels… However, it seems that the current fauna increased exponentially and is now a real jungle with many new and different animals.

Since the jungle seems to be filled with a large number of beasts, this article will be divided into two parts. No doubt there will be many more, but it is understandable that this jungle is a living habitat, and it would be pretentious to try to cover all the species that exist in it.

Unicorns and their relatives

Let’s take a look at unicorns, probably the most famous animal in the startup ecosystem,  and the different species and subspecies related to it.  Let’s immerse in the safari:

  • Unicorn: A privately funded startup whose value to investors has exceeded USD 1 billion. It is estimated that there may currently be more than 800 unicorns worldwide.
  • Decacorn: Startup whose value to investors has exceeded USD 10 billion. It is estimated that there may currently be more than 20 Decacorns worldwide.
  • Hectacorn: Startup whose value to investors has exceeded USD 100 billion. There is only one hectacorn globally, China’s Bytedance.
  • Poni: Startup whose value to investors has exceeded USD 10 million.
  • Centauro: Startup whose value to investors has exceeded USD 100 million.

It should be mentioned that any of the above types are only called unicorns if they are not listed on organised stock exchanges. There are also a number of other species, related to unicorns, that we should be aware of:

  • Dragon: A unicorn that has fully repaid the funds contributed by its shareholders.  They are much rarer than unicorns and their valuation is related to profit generation and cash-flow and not to their revenue and/or customer figures, which are characteristic of the species mentioned above.
  • Donkey: Overvalued unicorn.
  • Dinosaur: Startup that has already gone public but is considered highly overvalued.
  • Minotaur: Startup whose valuation for investors would be over USD 1 billion considering only the money put in by shareholders over the life of the company.

From the original unicorn, a series of other genres and sub-genres have gradually appered filling the jungle of entrepreneurship. But beware, being a shareholder of a dragon is not the same as being a shareholder of a minotaur or a simple unicorn. Although the valuation of the startup may be the same, the implications for shareholders are radically different. The risks taken by an investor in a dragon startup are very low since he/she has already recouped the full amount of the capital invested. In contrast, the risks for an investor in a minotaur are quite high.

In part two of this post we will continue with this jungle safari and talk about the rest of the species that populate the jungle. We will then meet the bear, the pig, the rhino, the elephant…

oscar valles
Oscar Valles
CRO de Fellow Funders

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