- Huge bubble where startups valued at almost around $1trillion are not regulated.
- They are not required to report anything to public.
- Eventually, VC will need liquidity that may force these companies to go public.
- Once public, they are required to show significant growth to justify super high premium valuation.
- If few of the top unicorns fail to show that growth, market may tank, VCs may loose money.
- VCs who lost money may be more cautious in future but may also have hard time raising capital.
- Many Unicorns do NOT have higher entry barriers or network effects. For instance, why can't same driver serve users from Uber, Lyft & 10 other apps, cheapest for customers & highest paying for driver - an arbitrage opportunity? Or why can't someone list house on Expedia,Travelocity along with Airbnb?