/’yōonə,kôrn/, v.

A company, usually a tech start-up, without an established performance record, but with a stock market valuation estimated at more than $1 billion.

Once upon a time, back in the days of tech industry yore — that is to say, 2013 — Aileen Lee, a tech venture capitalist and founder of Cowboy Ventures in Palo Alto, wanted to know how realistic it was to find and invest in a tech startup that would eventually gain a valuation of $1 billion. She found that in 2013, just 0.07 percent of venture-backed companies hit this mark — a total of only 39 companies worldwide. She called them members of The Unicorn Club. As of March 2017, the club has exploded: According to TechCrunch.com, there are now 234 unicorn companies with a total valuation of $832.8 billion. (Of course, in true tech industry excess, unicorn has already quickly become outdated: “Decacorn” is reserved for the rarified few who reach the $10 billion valuation mark, and hilariously, Canadian tech unicorns are referred to as “narwhals.”)

The Buzz

The biggest mistake people make, AngelHack Chief Marketing Officer Brian Collins says, is to call your company a unicorn when it’s clearly not.

“That happens all the time,” he says. “It’s a really easy way to discredit yourself in front of investors.” It is possible though to be considered a unicorn without actually reaching the valuation requirement, Collins says. This is especially true if the company is from an area not well-known for tech unicorns — like Sacramento — and is very near to the $1 billion valuation. Collins points to Trilio as an example — a data recovery and backup company in Hopkinton, Mass., about an hour outside of Boston. Their offices are not based in a tech hub, it’s not at $1 billion yet but is very close, he says, and “what they do and the speed at which they do it” qualifies Trilio as a unicorn in his mind. But, Collins warns, your company is not a unicorn just because it’s worth more than others.

While it can be dangerous to use the term if you’re not yet a unicorn, he says, “It’s never dangerous to want to be a unicorn. That can cause a lot of buildup and excitement in your team. That’s the right mindset and you can be bold. Just be careful in calling yourself a unicorn when you’re not already one.”

The Word

Though Collins stays mum on the possibility of a Sacramento unicorn emerging anytime soon, he does say we’re in a prime mode for it. AngelHack ranks cities into four categories, with tech hubs like London, Singapore, Tel Aviv and San Francisco at the top of the list. Sacramento is on a level, he says, where there’s more capital in town than talent. “If everyone deployed their capital tomorrow, [Sacramento tech companies] would be overfunded,” he says. “That’s actually a good thing to develop a unicorn system.” That’s exactly where unicorns come from, Collins says.

If Sacramento wants a unicorn in town, then “we have to focus on talent — bringing in the right talent, and keeping it here,” he says. That’s a good goal to have though, because having one unicorn in town, “empowers and pushes their region further along in the economy,” he adds. In short, one unicorn breeds more. Prepare for a stampede.

Got a word thats been buzzing around your office? Tweet us @Comstocksmag with the hashtag #WhatstheBuzz