Explain the concept of ‘Unicorn' and its main features. Or Explain Venture Capital method for valuing startups.

A Unicorn is a privately held start-up company which has achieved a valuation US$ 1 billion. This term was coined by venture capitalist Aileen Lee, first time in 2013. Unicorn, a mythical animal represents the statistical rarity of successful ventures. A start-up is referred as a Unicorn if it has following features: A privately held start-up.Valuation of start-up reaches US$ 1 Billion.Emphasis is on the rarity of success of such start-up.Other common features are new ideas, disruptive innovation, consumer focus, high on technology etc. However, it is important to note that in case the valuation of any start-up slips below US$ 1 billion it can lose its status of ‘Unicorn'. Hence a start-up may be Unicorn at one point of time and may not be at another point of time. OR As the name suggests, venture capital firms have made this famous. Such investors seek a return equal to some multiple of their initial investment or will strive to achieve a specific internal rate of return based on the level of risk they perceive in the venture. The method incorporates this understanding and uses the relevant time frame in discounting a future value attributable to the firm. The post-money value is calculated by discounting the rate representing an investor's expected or required rate of return. The investor seeks a return based on some multiple of their initial investment. For example, the investor may seek a return of 10x, 20x, 30x, etc., their original investment at the time of exit. New-age startups are disruptors in their own right and a necessary tool for global innovation and progress. By their very nature, startups disrupt set processes and industries to add value. In that process, they transcend traditional indicators of success like revenues, profitability, asset size, etc. Accordingly, it is no mean feat to uncover the actual value of a startup. While the traditional methods fall short, there is no shortage of new innovative methods used to value startups based on their value drivers. However, the valuation of a startup is much more than the application of ways – it is about understanding the story of the future trajectory and communicating that narrative using substantial numbers.