Helen H. Richardson / Contributor
Brad Feld.
In a tweetstorm Monday, Feld warned that just because a company is valued at more than a billion dollars, that doesn't mean it's a "unicorn."
The term "unicorn" is used today to refer to private tech companies with a $1 billion valuation, but it was originally investor-speak for the rare startup that offers massive returns, and can make an entire fund.
A company's valuation is relative and fleeting, and not necessarily indicative of how much it's going to be worth over time.
As chatter about billion-dollar companies continues, Feld's tweetstorm couldn't have come at a better time. On Monday, health insurance startup Oscar announced that it had just closed a $4145 million round of funding, making it the latest company with a billion-dollar valuation.
Here's what he had to say:
1. I'm starting to see companies that crested $1b from the last 1990's referred to as Unicorns
- Brad Feld (@bfeld) April 20, 20152. Useful history lesson - some of these were worth > $1b.
- Brad Feld (@bfeld) April 20, 20153. But many of them were worth a lot less in the end.
- Brad Feld (@bfeld) April 20, 20154. Some went bankrupt (well - a lot went bankrupt).
- Brad Feld (@bfeld) April 20, 20155. Others were bought for much less than $1b.
- Brad Feld (@bfeld) April 20, 20156. Two from my life were Interliant and MessageMedia.
- Brad Feld (@bfeld) April 20, 20157. Interliant peak market cap as a public company was just under $3b in 2000.
- Brad Feld (@bfeld) April 20, 20158. It went bankrupt in 2002.
- Brad Feld (@bfeld) April 20, 20159. MessageMedia peak market cap as a public company in 2000 was around $1.5b.
- Brad Feld (@bfeld) April 20, 201510. DoubleClick acquired it in 2002 for $14m.
- Brad Feld (@bfeld) April 20, 201511. Just remember - it's not cash until you can buy beer with it.
- Brad Feld (@bfeld) April 20, 2015