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Markets in Everything - Unicorn Tears
Generali
Posts: 36,411 Forumite
There is A Thing in the world of internet start-ups called 'a unicorn'. A 'unicorn' is a start up with few or no profits that is worth a billion US dollars.
So how does a company become a unicorn? Well it's a relatively straightforward process. You start a website, for example letting people share something in return for a fee. Usually this is something that an employee would do like cleaning or something but by getting them to 'share' their labour you get around all those annoying costs of having employees like sick pay and pension payments.
Anyway, when you get your first round of funding you might sell 5% of your company for $100,000 thus valuing the firm at $2,000,000. You promise the first round of investors that any future funding will be done at a higher price so even if you dilute the current investors' shares you will ensure that the cash going into the company more than makes up for the dilution.
So the valuation of the company is now on a ratchet until one day you sell 10% of the company (say) for $100,000,000 a lo a unicorn is born.
As these shares aren't traded on any stock exchange there is no price discovery for them so unicorns can't be unmade except by going bust. As a result, or so the theory goes, there are quite a few unicorns sitting around which should be worth ~$0 but are apparently worth a billion dollars.
To cash in on this market for unicorn starters that can't raise more capital but can't continue without raising more capital there is now a drink to wash away the bitter taste of failure.
Only £39.99 for the disillusioned venture capitalist in your life.
http://www.firebox.com/product/6970/Unicorn-Tears-Gin-Liqueur
So how does a company become a unicorn? Well it's a relatively straightforward process. You start a website, for example letting people share something in return for a fee. Usually this is something that an employee would do like cleaning or something but by getting them to 'share' their labour you get around all those annoying costs of having employees like sick pay and pension payments.
Anyway, when you get your first round of funding you might sell 5% of your company for $100,000 thus valuing the firm at $2,000,000. You promise the first round of investors that any future funding will be done at a higher price so even if you dilute the current investors' shares you will ensure that the cash going into the company more than makes up for the dilution.
So the valuation of the company is now on a ratchet until one day you sell 10% of the company (say) for $100,000,000 a lo a unicorn is born.
As these shares aren't traded on any stock exchange there is no price discovery for them so unicorns can't be unmade except by going bust. As a result, or so the theory goes, there are quite a few unicorns sitting around which should be worth ~$0 but are apparently worth a billion dollars.
To cash in on this market for unicorn starters that can't raise more capital but can't continue without raising more capital there is now a drink to wash away the bitter taste of failure.
Only £39.99 for the disillusioned venture capitalist in your life.
http://www.firebox.com/product/6970/Unicorn-Tears-Gin-Liqueur
0
Comments
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Oh and maybe this is the next Chinese unicorn:
http://www.bloomberg.com/news/features/2015-09-17/china-vcs-are-going-crazy-for-girl-groups
A Yuan is about 10p so divide the numbers by 10 to get them in pounds.0 -
Oh and maybe this is the next Chinese unicorn:
http://www.bloomberg.com/news/features/2015-09-17/china-vcs-are-going-crazy-for-girl-groups
A Yuan is about 10p so divide the numbers by 10 to get them in pounds.
Unicorn Tears wouldn't be a bad name for a girl group."Real knowledge is to know the extent of one's ignorance" - Confucius0
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