Definition - What does Unicorn mean?
The term, unicorn, has different meanings in the business world:
In the venture capital industry, a unicorn refers to any tech startup company that reaches a $1 billion dollar market value as determined by private or public investment. The term was originally coined by Aileen Lee, founder of Cowboy Ventures.
A unicorn refers to a phenomenon that occurs in human resources when those who are responsible for hiring candidates have impossible expectations. This stems from a mismatch between the expectations of the employers and who is available for hire. In other words, human resources is looking for a mythical candidate (i.e. a unicorn), rather than facing reality.
Applying a similar analogy to mergers and acquisitions, in a market where there appears to be a surplus of firms available as targets, the common mistake is to tack on too many unnecessary requirements, which may not really lead to positive synergies or be in sync with the objectives of the acquiring firm.
Divestopedia explains Unicorn
Recruiting by businesses has become more and more difficult because, while the market is teeming with candidates, managers are demanding unicorns, or candidates with qualifications that go much beyond the scope and scale of the job.
Small and medium enterprises cannot afford to have a large number of full-time employees to handle the various specialist roles required in a firm. The firms, therefore, employ a single resource with some strong points, hoping that the individual will be able to address the most pressing needs. This often leads to disappointment with unfulfilled expectations. The unrealistic expectations are often put together based on a wishlist from various heads of the firm and are often mutually exclusive traits that are unlikely to be found in a single person. For example, an accountant who speaks five languages at the lowest pay scale in your specific time frame is as rare as a unicorn. The firms can instead take recourse to fully in-source, fully outsource, or use a hybrid approach.
In terms of finance, some heads of small enterprises are aware of the cost of mismanaging finances. Even so, they put off looking for help because they believe that finding someone who is smart and savvy and worth the cost of their advisory fees is equivalent to finding a mythical creature like a unicorn. However, there are some who unrealistically believe that one person will be able to take on all the roles and be a banker, a financial planner, an insurance agent, etc.
Why A Major Corporation Would Buy Your Local Business
Join thousands of others with our weekly newsletter