Business Startups Venture

Unicorns, Undercorns, And Horses: A Guide To The Nonsense

Morning Markets: What do you call a failed unicorn? 

It’s been more than a half-decade since Aileen Lee of Cowboy Ventures kicked off the unicorn craze. Noting in a well-read post for TechCrunch that an interesting cohort of private companies worth a billion dollars or more was worth examining, the post brought the “unicorn” into its current usage inside of tech.

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And then tech itself did the term a favor, building and financing hundreds more. Now unicorns swarm like fleas, and simply snagging a $1 billion valuation these days is something that has been done in mere months and is a well-known vanity tactic used to juice hiring.


This has now gone on so long that many of us in the tech-focused journalism space are sick of saying the word. Kate Clark, Equity co-host and cool person, literally has “I am so sick of the buzz word [sic] ‘unicorn'” on her Twitter page. I agree with the sentiment.

But the phrase unicorn is back in the mix, so let’s examine the hubbub.

Booms And Busts

The term unicorn quickly became overused as startups stayed private longer by pushing IPOs off as long as they could, and the capital world decided it was fine. Bored capital was pooling in venture coffers where it was itching to be disbursed by the wealthy into the holsters of the privileged. And thus the companies that in other cycles might have gone public simply didn’t, and the ranks of unicorns multiplied.

Soon the overused “unicorn” moniker was also too small. Decacorns took their own spot in the pantheon of silly names. A decacorn, in case you’ve led a more exciting life than me and are thus otherwise unfamiliar, is a private tech company that has racked up a $10 billion valuation. (A centacorn, I suppose, would be worth $100 billion?)

What a unicorn is has stretched and bent over time. But regardless of how the phrase has come to be defined in recent quarters, most people are talking about tech shops when they use it. And that’s pretty reasonable.

But what tech companies do very well is go up, and go down. And that’s when we wind up on the other side (tail-end?) of the unicorn debate: All are agreed that the phrase unicorn is useful. Not all, however, agree on what we call a unicorn that has fallen.


We have two questions: What do you call a unicorn that falls under the $1 billion valuation mark. And, relatedly, what do you call a unicorn that eventually goes public or otherwise exits at a discount to its final private market valuation?

Regarding the leading question, there are two definitions that I am aware of.

First, as has come back into the discussion this week, there’s the concept of an “undercorn.” As Business Insider noted through a blog citation, Axios’ Dan Primack may have coined the term. Here, per Ian Sigalow’s post which quotes the original Dan, is what Primack said:

When a venture-backed company breaks through the $1BN valuation mark, we call it a Unicorn. When the same company falls back below the $1BN threshold, it becomes an Undercorn.

That’s simple enough. However, Erin Griffith of The New York Times used the phrase recently in a slightly different manner. Here’s her riff:

Unicorns that sell or go public below their last private valuation are known as undercorns.

That’s different, as it’s defining undercorns as exited unicorns that lose altitude; that’s different than unicorns losing their unicornyness altogether. However, as we’re working on defining made-up words to describe an economic anomaly caused by government-determined free money, we can relax a little and realize that both uses of the word undercorn are equally differentiated from zero.

Now I get to talk about myself. I had my own thoughts on what a unicorn that had lost the requisite billion-dollar valuation should be called back in 2016. Regarding what a unicorn that had fallen under the needed worth:

If a unicorn is a horse with a spike, when you take the spike off you just have a horse.

I thought it was pretty smart. No one else agreed, and thus I have to admit that Primack and Griffith have made quite a lot more noise with the undercorn phrase, even if they don’t quite agree on what it means. (Feel free to become a partisan of either side, as we are long overdue for something useless and entertaining on the Internet.)

Sadly, there are even more unicorn-related terms and phrases in and amidst the tech conversation that we shouldn’t miss.

Exotica And Other Notes

Returning to Axios, it has a new phrase out this year that’s worth keeping in our hat. From its February coverage of the venture landscape, I give you the phrase “minotaur:”

The Big Picture: Meet the minotaurs — our term for the companies that would be worth more than $1 billion even if the only thing they did was to take the cash that they have raised and put it in a checking account.

I wanted to hate this, but wound up deciding that there are a host of worse words that could have been selected. And as it wasn’t a unicorn-variant, how could I complain?

The only other thing I can recall that fits our task today is something that Jason and I wrote four years ago in TechCrunch. As a follow-up to our “How To Speak Startup” post, we wrote the brilliantly titled “How To Speak Startup, Part Deux,” which contained the following definition:

Unicorn — As if metaphors in Silicon Valley couldn’t get more childish.

The joke’s on us, however, as we have used the term on the order of six billion times since then. And that’s that, I think. Now you know!

Illustration: Li-Anne Dias


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