Where Unicorns Come From: Genealogy of $1B+ Companies

This post details a proposed session that Kauffman researchers would like to bring to SXSW Interactive 2016. Read below to learn more, and head to PanelPicker to vote if you’d like to see this session at the festival! Learn more about our other session proposals.

There is a 0.00006% chance of building a billion-dollar company.

The Economist recently showcased the explosion of private companies with a valuation over $1 Billion—these are also known as “Unicorns.” The article highlighted multiple similarities of current day valuations of tech companies to those of companies preceding the Dot-com bust of the early 2000s.

Regardless of the potential downsides of overvaluation of tech companies—the “squint test” used to evaluate, the “down round,” and the potential ripple effects to the economy with a bust—The Economist leaves the reader with a resounding positive perspective on these unicorns, “[m]any firms may be overvalued this time, too, but few are worth nothing.”

The technology and entrepreneurship media world continue to talk about the anomaly of unicorns, what they do, and how they’re unique. But, little is known about the companies and their founders prior to their $1B valuation.

Ongoing Research

Uber. Airbnb. Palantir. These are a few examples of revolutionary companies that have broken into the exclusive Unicorn club of the 123 private companies worth more than $1 Billion Dollars.  

Kauffman researchers are exploring the path of the selective few took to arrive there. Moreover, the research will aim to understand the entrepreneurial genealogy of these companies, with an in-depth look into the networks of investors, ventures, and universities that led these founders on the path of creating a unicorn.

Among other things, this research will explore:

  • Patterns of education among billion-dollar founders
  • Insights on which Unicorns were spin-offs of other companies
  • Networks of investors most likely to be funders of Unicorns 
Questions answered in this proposed SXSW Interactive session include:
  1. What networks of investors, ventures, and universities lead founders on the path to creating a Unicorn?
  2. What insights can we learn from the journey of creating Unicorns to help other entrepreneurs grow their companies?
  3. What are the commonalities of Unicorn founder’s networks of investors, ventures, and universities?

To answer these questions, researchers will use data science tools and data from CrunchBase, LinkedIn, and entrepreneurship media outlets, the researchers will present the findings related above and others.

The methods used for this project will draw from previous research — such as the network analysis project [1] presented at the Facebook headquarters in Silicon Valley, mapping of investments and acquisitions made by Facebook and Google [2] — and from a long history of research literature on entrepreneurial networks, entrepreneurial genealogy, and entrepreneurial spawning. This work has been featured on outlets like Forbes, Business Insider and Venture Beat.


Past Research

[1] Building a Robust Entrepreneurial Ecosystem, Network Analysis


Vote for our Session!

Vote for this session to learn about the entrepreneurial genealogy of unicorns and their founders at SXSW Interactive 2016.

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