What Are Unicorn Startups And How Can One Invest In Them?

Unicorn startups, if chosen right, are multi-baggers. However, the risk is relatively high. Fast-growing startups are called ‘unicorns’ because they are too good to be true and very rare to find just like the mythical creatures. This, however, was the situation of the past; in today's times finding a unicorn startup is not that difficult. In fact, in 2020, there were around 500 of them globally!

Unicorn startups are a quintessential part of a high profit yielding investment portfolio and if you are interested in them, here’s everything you need to know before you start out-

A brief understanding of unicorn startups -

Any startup that reaches a billion dollars valuation before going public is called a Unicorn Startup. These private ventures achieve this quotation by making sales and capitalizing on a significant piece of their target market. Even the startups that have not yet grown that huge but have an innovative product or business model and offer a very promising potential of success, are often regarded as unicorns by the investors. A few examples of unicorn startups that are present in the current market are SpaceX, Robinhood, Revolut, Stripe, ByteDance, and Grab.

The trick of the play here is to invest in a unicorn at the right time. Getting in late means losing out on a huge profit potential while investing too early exposes the investor to higher risks. Industries like IT, fintech, and health tech have seen a significant upsurge in the number of unicorn startups present in the market today and this is sole because of the humongous scope of innovation they carry. There were only 39 unicorn startups present across the globe back in 2013 when the term had just been introduced, the number has grown ever since and has reached a count of 488 in 2020!

To find out the valuation of a startup, just check how much money they raised in the latest round of funding and you would know how much the investors are ready to pay to become part of the young startup’s journey. However, these sums are rather huge and can reach millions or even billions of dollars. As an investor, you need to keep in mind that investing in such revolutionary startups can be quite risky as there is a higher probability of the new idea failing and a prime example of that is the failure of WeWork in 2019.


Please Read The Original Post Here: What Are Unicorn Startups And How Can One Invest In Them?



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