Once upon a time, reaching a $1 billion valuation was a Big Deal. But the shine that a so-called unicorn valuation conferred on a startup eroded as more and more private companies reached the threshold — often with less and less to back it up.
, where the term “unicorn” was born, noted the dilution of the denomination by working to collect notes instead on startups that had reached a $100 million revenue run rate, often measured in the form of annual recurring revenue, or ARR.
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That project was continued by a venture capital firm, dubbing startups that reached the nine-figure revenue mark “centaurs,” for obvious reasons. The refocus was useful, as there was more to learn from startups that reached $100 million in revenue than those that were awarded $1 billion in valuation.
But what about former startups that reach 10 figures of revenue? What can we learn from them?
Friends & Family Capital (multi-stage, mostly focused on companies with eight-figure revenue growth at 80% or more) ran an interesting analysis of private companies that sought to find out. Friends & Family compiled its findings into a report that I recently digested. also spoke with John Fogelsong and Colin Anderson from the firm about what they learned from the data.
The result is a series of notes about startups that don’t stop at $10 million or $50 million worth of revenue before they sell to some larger firm. Here’s how the biggest private-market companies got there.