Here's how hard it is to make a killing in venture capital

There was a time when it was rare for a startup to reach the exclusive “Unicorn” club, the term given to startups worth more than $US1 billion.

But times have changed, and unicorns have become a lot more common lately. According to research firm CB Insights, there are a total of 99 startups valued at more than $US1 billion, with 40 of them joining the unicorn club in 2014 alone. In 2015, CB Insights predicts there will be 50 new unicorn startups.

But it’s also worth noting that the combined value of all the unicorns is still less than the market cap of Facebook (as of April 2015). As seen in the chart below by BI Intelligence, based on CB Insights’ data, Facebook out-values the unicorns by almost $US20 billion.

This means at least one or two of these unicorns will likely blow up eventually and get to Facebook or Google’s status. But this is also a sign that it’s extremely difficult to make a killing in venture capital, because a lot of these unicorn startups will likely wind up failing to reach these lofty expectations, and “vaporise” when the market turns, as famed VC investor Marc Andreessen once warned.

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