The Unicorn Benchmark Is Dated

The unicorn benchmark is dated.

Valuations have crept up over 2x in the last decade across every stage, especially when adjusted for progress, making unicorn status easier to hit. And fund sizes have ballooned even faster; most institutional-scale funds can barely return 1x on a unicorn outcome anymore. In many cases you now need a decacorn just to clear the S&P over a 10-year horizon, and sometimes not even that, as Wiz/Insight showed.

Thanks to inflation, today’s $1B is closer to $700M in 2015 dollars.

It’s now easier to hit unicorn while harder for unicorns to matter.

If you’re a founder, it’s worth knowing how much enterprise value you need to create to actually matter to the fund backing you. That number is probably higher than you think and it shapes how your investors partner with you.

When your life-changing exit doesn’t put a dent in your investor’s fund, incentives misalign fast.

Know the math before you take the check. Then aim accordingly.