Just because it's worth $1 billion doesn't mean it's a unicorn, says VC who lived through the last bubble

Maya Kosoff

Apr 20, 2015, 23:30 IST

Helen H. Richardson / Contributor

Brad Feld.

Brad Feld, the founder of both tech incubator Techstars and Boulder-based VC firm Foundry Group, has a message for Silicon Valley.

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.

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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, 2015

2. Useful history lesson - some of these were worth > $1b.
- Brad Feld (@bfeld) April 20, 2015

3. But many of them were worth a lot less in the end.
- Brad Feld (@bfeld) April 20, 2015

4. Some went bankrupt (well - a lot went bankrupt).
- Brad Feld (@bfeld) April 20, 2015

5. Others were bought for much less than $1b.
- Brad Feld (@bfeld) April 20, 2015

6. Two from my life were Interliant and MessageMedia.
- Brad Feld (@bfeld) April 20, 2015

7. Interliant peak market cap as a public company was just under $3b in 2000.
- Brad Feld (@bfeld) April 20, 2015

8. It went bankrupt in 2002.
- Brad Feld (@bfeld) April 20, 2015

9. MessageMedia peak market cap as a public company in 2000 was around $1.5b.
- Brad Feld (@bfeld) April 20, 2015

10. DoubleClick acquired it in 2002 for $14m.
- Brad Feld (@bfeld) April 20, 2015

11. Just remember - it's not cash until you can buy beer with it.
- Brad Feld (@bfeld) April 20, 2015

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