The State of Startups Today: Everybody’s Building a Unicorn But Nobody Wants to Go Public

This week, seed-stage firm First Round Capital released its second-annual State of Startups report, which surveyed more than 700 founders to form an in-depth snapshot of founders and startups across the entire tech ecosystem.

Here are two major themes we noticed in the report.

A Shift in Power

It seems that there is currently a shift in power from entrepreneurs to investors.

“For the second year running, founders point to investors as having negotiating power, and their conviction has strengthened: two-thirds of all founders believe investors will hold more sway,” the report states. “Last year, just over half (54%) of respondents felt similarly.”


The above two charts capture the shift perfectly.

Building Unicorns, Staying Private

Almost a fifth of entrepreneurs believe they’re building a unicorn: 18% of leaders say they’re certain they’ll build a billion dollar company.

But most of these unicorns don’t plan to go public. Only 43% of entrepreneurs believe the IPO market is improving and 72% see the merger and acquisition market as more a promising opportunity over the next year.


Moreover, early one-third of startups don’t intend to ever IPO.

Lessons in Legitimacy for Entrepreneurs: How Startups Become Companies