Why Chasing Unicorn Status is Overrated for Investors & Founders 🦄

In the startup world, the term "unicorn" is synonymous with massive success—a company valued at $1 billion or more. For many early-stage founders and investors, the idea of creating or backing the next unicorn can feel like the ultimate goal. But let’s take a step back and ask: Is chasing unicorn status really the right focus?

The truth is, achieving unicorn status is an exception, not the rule. Fewer than 1% of startups ever reach that valuation. However, that doesn’t mean the remaining 99% are failures. In fact, some of the most impactful, profitable, and sustainable businesses never wear the billion-dollar crown—and that’s okay.

For Founders: The Reality of Building a Great Business

As an early-stage founder, it’s easy to get caught up in the idea of needing to scale at all costs. The pressure to grow quickly, raise large rounds of funding, and hit sky-high valuations can be overwhelming. But here’s the thing: Your success isn’t defined by becoming a unicorn.

• Impact Over Valuation: Building a business that solves a real problem, employs people, and serves customers well is invaluable—even if it doesn’t hit a billion-dollar valuation.

• Sustainability Matters: Startups that prioritize steady growth and profitability often last longer and weather economic downturns better than those chasing hypergrowth.

• Personal Fulfillment: Creating a business aligned with your values and vision often leads to a more satisfying entrepreneurial journey than chasing external validation.

For Funders: The Myth of the Billion-Dollar Exit

As an investor, the unicorn narrative can sometimes cloud good judgment. It’s tempting to bet only on companies with the potential to deliver a massive exit, but this mindset ignores the broader landscape of opportunity.

• Smaller Exits Add Up: A portfolio filled with companies that exit at $50M-$300M can deliver strong returns without requiring any of them to become a unicorn.

• Fewer Risks: Startups with realistic growth goals often avoid the pitfalls of overextension, providing more stable returns for investors.

• Supporting Real Solutions: By backing companies that focus on solving real problems over chasing valuations, you’re contributing to meaningful innovation and sustainable growth.

Success Is Not One-Size-Fits-All

Unicorns may capture headlines, but they don’t define success for every founder or funder. True success lies in:

• Building a product or service that genuinely helps people.

• Growing a business with strong fundamentals and sustainable revenue.

• Creating opportunities for employees, customers, and communities.

Every founder’s journey is unique. Every investor’s portfolio is a mix of bets with different trajectories. The obsession with unicorn status can often distract from the more rewarding—and achievable—goal of building great companies that create value for everyone involved.

The Takeaway

Whether you’re a founder or a funder, remember: chasing unicorn status is like aiming for the stars. It’s inspiring, but not the only path to success. Sometimes, the real magic happens in the companies that don’t make the front page but still make a difference.

So, let’s celebrate the 99%—the startups that grow steadily, exit thoughtfully, or carve out a meaningful space in the market. After all, success isn’t about fitting the unicorn mold. It’s about building something extraordinary in your own way.

Until next time—keep building!

Cheers, 

Steve Walsh 

Founder, Hands On Angel

P.S. Want actionable strategies to ace your next investor meeting? Join The Funding Accelerator and take control of your fundraising journey! 🚀