What is a 'unicorn' in startup talk?

Answer

Investor Aileen Lee popularized the term in 2013.

Context

Venture capitalist Aileen Lee of Cowboy Ventures popularized the term in a TechCrunch article published on 2 November 2013. She used it for a US-based software company founded since 2003 and valued at over $1 billion by public or private investors, and picked the mythical animal to signal rarity. Her list contained 39 companies as of 31 October 2013.

Lee's data put the odds at roughly 0.07 percent of venture-backed consumer and enterprise software startups, about 1 in 1,538, though that rests on her estimate of around 60,000 funded companies. She found about four unicorns were created per year on average over the decade, and those that exited took around seven years to reach a sale or public listing. Facebook, valued above $100 billion, was excluded from some of her averages as an outlier.

The word has since been stretched. It is now used internationally and across industries, and is often applied to any private company with a $1 billion valuation, and bigger tiers such as 'decacorn' ($10 billion) have been coined. A caveat is that these valuations come from the price of the latest funding round, often paid for preferred shares with special rights, so the figure can overstate what the company would fetch in a sale.