Silicon Valley Legal Bible（21）Unicorn Decacorn and Hectocorn Soonicorn、Minicorn、Brokencorn
The term "Unicorn" refers to a privately held startup company valued at over $1 billion USD that has been in existence for less than 10 years. But did you know that beyond Unicorns, there are larger variants like Decacorns and Hectocorns, as well as smaller ones such as Soonicorns and Minicorns? There’s even a unique category called Brokencorns.
So, what exactly is a Unicorn company? What are the origins of its "grandfather," "father," "son," and "great-grandson" in this family tree? And what kind of harm has the bloodcurdling Brokencorn endured? Today, let’s explore the concept of the Unicorn.
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The concept of the Unicorn was the first to emerge. From this origin, two derivative categories branched out: larger ones like Decacorns and Hectocorns, and smaller ones such as Soonicorns and Minicorns .
1.Unicon
To fully understand these derivative concepts, let’s first clarify the definition of a Unicorn.
The concept of a Unicorn hinges on three core criteria:
Time: Founded <10 years
Valuation: >$1 billion USD
Status: Privately held (not publicly listed)
The requirement of being privately held remains non-negotiable. However, the “<10 years” timeframe has become more flexible over time, making valuation exceeding $1 billion the most critical benchmark for Unicorn status.
Currently, there are over 1,200 Unicorn companies globally. More than half are based in the U.S., followed by over 300 in China, with India, the UK, and Germany rounding out the top rankings.
Silicon Valley (San Francisco Bay Area, California, USA) is often dubbed the "Birthplace of Unicorns", home to 258 Unicorn companies. This represents:
Nearly half of all U.S. Unicorns,
1/4 of the global Unicorn total,
And exceeds the combined count of Unicorns in China and the European Union.
2.Decacorn
Let's take a look at the Decacorn, which is larger than the Unicorn, which is a private company with a valuation of at least $10 billion.
There is actually a problem with the English-Chinese translation here. As we all know, the position of the numbers in English is different from that of the comma in Chinese. So why is a valuation of more than $1 billion a "Unicorn"? Because $1 billion is $1b in English. Then why is a valuation of more than $10 billion a "Decacorn"? Because $10 billion is $10b in English. Similarly, the Hectocorn to be introduced next is a company with a valuation of more than $100 billion, because $100 billion is $100b in English, which should be easier for everyone to understand.
In addition, the Deca in the English word Decacorn is a prefix, which comes from Latin and means "ten", which corresponds to the decades we often use. Similarly, the Hecto in the Hectocorn, which we will introduce next, is also a prefix, which comes from Latin and means "hundred".
Okay, the English class is over, back to the legal channel.
As of January 2024, there are 43 decacorn companies in the world.
From a geographical point of view, most of the decacorns are distributed in the United States, and a small number are in China and the United Kingdom. Among them are the well-known OpenAI, Notion, Xiaohongshu, Yuanfudao, DJI Innovations, Genki Forest, and even Weilong.
3. Hectocorn
Similarly, a Hectocorn is a startup that is ten times larger than a Decacorn and valued at at least $100 billion. There are only three Hectocorns in the world: ByteDance, Shein, and SpaceX.
In previous content, we have introduced the "de-byte" global architecture of ByteDance, and the "de-Sinicization" global architecture of Shein. Both TikTok and Shein are from China, making Chinese companies a force that cannot be underestimated in the world capital market.
4. Soonicorn
In addition to the concepts above unicorns, there are actually several derivative concepts below them. The closest to unicorns is Soonicorn, which are companies with a valuation close to one billion US dollars ($1b). Their business models have been verified and they have already occupied a considerable market share.
There are many quasi-Soonicorn companies. Let’s take the United States as an example. There are currently about 3,129 Soonicorn companies in the United States. The following are some examples of these companies.
5. Minicorn
Smaller than the Soonicorn is the Minicorn, which is a company with a valuation between $1m and $1b. At this point, Those who have a little knowledge of the subject will find it strange.What? $1m, are you kidding? What can you do with $1m? The angel round and seed round valuations of any startup in the United States are tens of millions, and the financing amount is millions of dollars. In places with slightly more developed economies, such as New York, Silicon Valley, and Los Angeles, buying a house costs more than $1 million. Yes, indeed, this is why the concept of Minicorn has not caused any impact in the media. It should be said that the standard of the concept of Minicorn is not valuation, but the uniqueness of the business model, which can be awarded this title. Then it can be imagined that there are countless companies that become Minicorns.。
6. Brokencorn
Among all kinds of "unicorns", there is another type that is often overlooked, that is "brokencorns". It sounds bloody. It refers to companies that were once crowned as unicorns but failed miserably, and its proportion among unicorns is as high as 17%. Some of them have encountered technical bottlenecks that cannot be broken through, some have experienced business declines under the epidemic, some have business models that cannot be verified, and some are completely "fake unicorns" with falsified data.
Today we learned about the different varieties of the unicorn family. Why did unicorn companies grow horns like crazy in the past decade, becoming decacorns and hectocorns, and then lose their horns in a blink of an eye? Why did Aileen Lee, a venture capitalist who first invented the word unicorn in 2013, start saying that 93% of unicorns are "paper unicorns" and 60% of unicorns are "zero interest rate unicorns" in 2023, ten years later? In the future venture capital circle, do unicorns still have value? Let's take a look together in the next issue. Silicon Valley Legal Bible 42 Chapters, a legal encyclopedia customized for founders. I am American lawyer Liu Xiaoxiao, see you next time.
