BS Pitchbook Report Bemoaning the Demise of Unicorns

Look, it was always a dumb idea to talk about your valuation. If it isn't clear already -- stop thinking about it; stop talking about it. It's not a meaningful business metric unless your stock is (a) worth something and (b) it goes from some small value to some much larger value.

Otherwise, it's just PR hype on parade and is likely to end badly for an inexperienced founder trying to show momentum.

Meanwhile, the economic reality set in right after Q1 last year, and any founder caught flatfooted has very little time to make tracks at this point.

Not going to lie, some of this report is kinda BS:

CLAIM: "The proliferation of unicorns, both domestically and globally, undoubtedly speaks to the innovation capability of these enterprises and the evolving venture ecosystem more broadly, but it also raises concerns about the market’s ability or willingness to provide exit opportunities for these organizations, namely through M&A."

RESPONSE: The proliferation of unicorns was more due to easy money on one hand, and new investor eCommerce FOMO on the other.

CLAIM: "This liquidity crunch has consequently trapped enormous amounts of value within highly valued organizations..."

RESPONSE:

Highly valued by whom? 👀

CLAIM:

" But, with the market and federal regulators seemingly becoming less capable or tolerant of supporting large M&A transactions, finding a suitable path forward will inevitably become more difficult."

RESPONSE: Their trapped valuation is the fault of federal regulators, who have done exactly what in the last few years? We are not talking about the EU here. This is the United States where Google has 90% of the search market in the United States for at least a decade.

CLAIM: " In fact, the US has more unicorns than the rest of the world combined. ... the growth in the number of billion-dollar enterprises has boosted their collective valuation to nearly $2.4 trillion—roughly 10% of the US’ total GDP." This is even more remarkable considering that just one decade ago the collective value of unicorns comprised only 0.4% of the US’ GDP."

RESPONSE: Remarkable, yes; Disturbing? Yes. Bubble? Absolutely.

CLAIM: "The inclination to stay private for longer also affords companies the ability to grow and develop intellectual property (IP), patents, and other intangible assets that strengthen their business model and allow them to be more competitive."

RESPONSE: It's good that private markets are so non-competitive (founders should breathe easily right!) and that no public companies develop patents. (Checks stats: Lowly startups Samsung, LG, IBM, Toyota top patent lists in 2022)

Look, the demise of unicorns in my mind should be cheered. Let's return to operators running businesses rather than "hype men/women."