Some startup "unicorns" are magical, and others are donkeys in party hats.
Illustration by Aleksandar Savic

A narrative in four images.

By Erin Griffith
September 21, 2016

The narrative of the technology industry’s “unicorn” startups—those that have raised money at valuations above $1 billion—can be easily told in Fortune cover stories.

In January 2015, they arrived:

Illustration by Jeremy Enecio for Fortune

We dubbed it the “Age of Unicorns.”

Then things got crazier. By the end of that year, we put the CEO of a billion-dollar, legally dubious gambling startup on the cover:

Photograph by Wesley Mann for Fortune

A few months after that, it all came crashing down:

Illustration by Goran Factory for Fortune

“Good luck getting out,” Fortune declared at the start of this year.

The tech industry has entered the Age of Austerity. Startups are cutting their burn rates. Valuations have come down. Non-traditional startup investors like mutual funds and hedge funds have slowed their crazy pace of investments in late stage companies, even as the largest startups—including Snapchat, Uber, and Airbnb—continue to raise giant piles of money.

Today new data from CB Insights, the venture capital research firm, shows just how much the environment has changed from last year, where it felt like a new startup got its unicorn horn every two days. In second quarter of this year, more venture capital-backed companies sold for at least $1 billion than raised money at billion-dollar valuations. In other words, startups may not be going public in droves, but they’re “getting out.”

This image sums up today’s environment:

Compared to the third quarter of last year, when 23 companies raised money at billion-dollar valuations and zero sold or went public, the financial environment of 2016 is starting to look downright reasonable.

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