The number of US unicorns – privately held startups valued at over $1 billion – has surged in recent years, and there is no shortage of lists tallying companies that reach unicorn status. However, these lists do not track unicorn exits, leaving critical questions about how and when unicorns are exiting – and what the outcomes are – unanswered.

In a new report prepared in collaboration with the UC Hastings Center for Business Law, Brattle researchers have analyzed the exit transactions of hundreds of unicorns to better understand their outcomes. The authors evaluated data on US unicorns between 2005 and 2021, describing the types of unicorn companies, their financing, and exit status.

Key findings from the report include:

  • The number of companies reaching unicorn status has been increasing each year since 2016, and, in 2021, there were a record number of new US unicorns, 334 – a 259% increase from 2020.
  • The most common exit for “mature unicorns” – those that reached unicorn status by 2015 or earlier – is an IPO, and the second most frequent exit is a merger/acquisition.
  • Mature unicorns that go public via IPO or reverse merger have a post-money valuation that is more than twice as high as those that exit via mergers/acquisitions and have considerably higher private financing.

The report, “The Unicorn Initiative: Exits,” and the accompanying site resulted from a joint research project between Brattle and the UC Hastings Center for Business Law. The full report was coauthored by UC Hastings Professor of Law Abe Cable, Brattle Associate Adrienna Huffman, and former Research Analyst Shuyi Deng. Research Analyst Monet Lee contributed research assistance.

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