--- title: Silicon Valley Unicorn Bubble Next to Burst?? description: Unicorn bubble to burst? image: https://www.sjordanassociates.com/hs-fs/file-3796282750-png/images/national.png --- ![](https://www.sjordanassociates.com/hs-fs/file-3796282750-png/images/national.png) # Silicon Valley Unicorn Bubble Next to Burst?? Published by [ Scott Jordan ](https://www.sjordanassociates.com/blog/author/scott-jordan) on Tue, Sep 01, 2015 @ 03:59 PM ![national](https://www.sjordanassociates.com/hs-fs/file-3796282750-png/images/national.png) http://inflation.us/silicon-valley-unicorn-bubble-next-to-burst/ When a private **venture capital (VC)** backed start-up successfully raises a round of funding at an ***implied valuation*** that***equals or exceeds $1 billion*** – it becomes a **“unicorn”** company. Currently, the ***largest US unicorn*** is **Uber**, which now has an ***implied valuation*** of **$50 billion**. Uber is estimated to have trailing **annual revenue** of **only $415 million**. ***This values Uber at an insanely high multiple of 120X revenue!*** The unicorn with the ***highest valuation/revenue ratio*** is **Snapchat**, a company that is currently worth **$16 billion**, despite estimated **annual revenue** of **only $1 million**. ***Snapchat is being valued at a shockingly high multiple of 16,000X revenue!*** ***America’s 15 largest unicorns are currently worth a combined $189.9 billion***, despite these 15 companies having total trailing **annual revenue** of **only $4.54 billion**. As a whole, the top 15 largest US unicorns are being valued at an ***unjustifiably high multiple of 42X revenue!*** Separately, it becomes very apparent and undeniable that **unicorns** have become ***America’s #1 most overinflated asset bubble!*** America’s top 15 largest unicorns are now being valued at a ***dangerously high median multiple of 69X revenue!*** [![unicornbubble1](http://inflation.us/wp-content/uploads/2015/08/unicornbubble1.jpg)](http://inflation.us/wp-content/uploads/2015/08/unicornbubble1.jpg)**Snapchat** not only has the ***highest valuation/revenue ratio of 16,000*** – but it also has the ***highest valuation per employeeof $400 million!*** America’s 15 largest unicorns are currently receiving an ***unprecedented median valuation per employeeof $17.5 million!*** [![unicornbubble2](http://inflation.us/wp-content/uploads/2015/08/unicornbubble2.jpg)](http://inflation.us/wp-content/uploads/2015/08/unicornbubble2.jpg) There is now a new record high of **76 unicorns** that have their ***headquarters located within the US***. America’s unicorn count has increased during every single month of 2015 – with a total year-to-date*** net addition of 27 unicorns***, ***up 50%***from a ***net addition of 18 unicorns*** during the comparable year-ago time period of January-August 2014! [![unicornbubble5](http://inflation.us/wp-content/uploads/2015/08/unicornbubble5.jpg)](http://inflation.us/wp-content/uploads/2015/08/unicornbubble5.jpg) **US based unicorns** are currently receiving a ***total implied valuation of $285.5 billion!*** This is ***up an amazing 102.63%*** on a year-over-year basis from their ***total implied valuation of $140.9 billion*** at the end of August 2014! The **average unicorn** is now worth **$3.76 billion**, for a ***year-over-year increase of 25.33%*** from from an average valuation of **$3 billion** at the end of August 2014! [![unicornbubble6](http://inflation.us/wp-content/uploads/2015/08/unicornbubble6.jpg)](http://inflation.us/wp-content/uploads/2015/08/unicornbubble6.jpg)It will be interesting to see just how badly **unicorn valuations** are ***negatively affected*** by the recent dramatic decline in publicly traded US stock valuations. Although **VC funded start-ups** are ***remaining private*** longer than ever before – as a result of their ***easy access to venture capital*** – ***most unicorn shareholders still plan to eventually exit through IPOs!*** ***On average, VC backed companies sell 20% of their total shares outstanding in IPOs.*** Therefore, the 76 US based unicorns that are worth a combined $285.5 billion, will ***need to attract $57.1 billion in IPO investment capital*** from Wall Street.***Over the trailing twelve month period, VC backed IPOs raised a total of only $11.91 billion!*** ***It will take approximately 4.79 years for VC investors in America’s 76 unicorn companies – to exit their investmentsthrough IPOs.*** The estimated time needed for all US unicorn firms to exit through IPOs is now ***3.71X longer*** than in January 2014! [![unicornbubble4](http://inflation.us/wp-content/uploads/2015/08/unicornbubble4.jpg)](http://inflation.us/wp-content/uploads/2015/08/unicornbubble4.jpg) Tags: [Bubble](https://www.sjordanassociates.com/blog/topic/bubble), [Unicorns](https://www.sjordanassociates.com/blog/topic/unicorns), [Private Companies](https://www.sjordanassociates.com/blog/topic/private-companies) [Back to Blog](https://www.sjordanassociates.com/blog) - [Tweet](https://twitter.com/share) ## Related Articles ## [Vital Signs #120 - How to build a $710 Million Biotech in Silicon Valley?](https://www.sjordanassociates.com/blog/bid/402846/Vital-Signs-120-How-to-build-a-710-Million-Biotech-in-Silicon-Valley) Crowdfunding Case Study: How to build a $710 Million Biotech in Silicon Valley? 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