Question

According to the venture capital industry, what is a unicorn?

• A. Any start-up that reaches to employ 1000 people
• B. Any start-up that makes its owner a billionaire
• C. Any start-up that raises $1 billion in venture capital
• D. Any start-up that reaches the valuation of $1 billion
• E. Any start-up that gives a dividend of $1 billion to its shareholders

Answer 1

The Correct Option is C

In the venture capital industry, the term "unicorn" refers to any start-up that reaches a valuation of $1 billion. The correct answer among the given options is: Any start-up that reaches the valuation of $1 billion. Here is a detailed explanation:

1. Valuation: A unicorn is a privately held startup company with a valuation of over $1 billion. This valuation is determined before the company goes public or gets acquired.

2. Origin of the Term: The term was coined by venture capitalist Aileen Lee to represent the statistical rarity of such successful ventures.

3. Significance: Achieving a unicorn status indicates not just financial success, but also market optimism and potential for growth.

Therefore, while the option "Any start-up that raises $1 billion in venture capital" seems related, "Any start-up that reaches the valuation of $1 billion" accurately describes a unicorn in the context of venture capital.