Next Unicorns evaluation + Ask Jason | E1590

Episode Summary

Executive Summary: This episode revisits three seasons of "The Next Unicorns," assessing which featured startups became unicorns, were acquired, or outperformed expectations. Jason argues that the 2021 funding boom inflated valuations, then spotlights successful outcomes across enterprise software, fintech, biotech, and consumer startups while reflecting on capital efficiency, acquisition dynamics, and emerging AI opportunities.

Main Topics: Retrospective on The Next Unicorns (Priority: 5/5): Jason introduces a new format that revisits 30 featured startups and checks their outcomes against the original unicorn thesis. 2021 funding boom and valuation distortion (Priority: 5/5): He contrasts today’s tightening market with the peak 2021 environment, arguing many companies raised at inflated valuations that may not hold in the new recessionary climate. Startup case studies and outcomes (Priority: 5/5): The episode walks through several companies—Checker, Upgrade, Expanse, Benchling, InCitro, Cockroach Labs, Loom, and Divi—showing which scaled, sold, or continued raising at much higher valuations. What makes a durable unicorn (Priority: 4/5): Jason frames the billion-dollar threshold as usually requiring real revenue, strong product-market fit, and a path to profitability rather than pure hype. Acquisitions, liquidation preferences, and deal structure (Priority: 4/5): Using Expanse/Palo Alto as an example, he explains how late-stage deals can be shaped by liquidation preferences, protective provisions, and acquisition incentives. AI and new startup opportunities (Priority: 4/5): In the Ask Jason segment, he predicts AI tools will unlock a new wave of founders building faster, cheaper software for branding, sales, science, and content creation.

Key Arguments: A billion-dollar valuation now typically implies meaningful revenue and a credible path to profitability, not just narrative or market enthusiasm. The internet, mobile devices, cloud infrastructure, and payments rails have made it easier for startups to scale globally and become unicorns faster than in prior decades. 2021’s low-rate, high-liquidity environment allowed many companies to raise at extreme valuations that may not be sustainable in the current market. Late-stage investors often rely on preferred terms such as liquidation preferences and protective provisions to manage downside in quick exits. Acquisitions can be successful when the acquirer preserves the target’s product and team; otherwise integrations often fail when the buyer over-controls the asset. AI will compress the time and cost required to build products, creating fresh opportunities in branding, analytics, recruiting, and creative workflows.

Data Points: Number of companies in The Next Unicorns series: 30 - Jason says three seasons featured 10 companies each. Checker revenue throughput: 1.5 million background checks per month - Daniel Yanis describes Checker’s scale on the original episode. Checker price per check: $55 - Jason references Checker’s background-check pricing model. Checker latest funding before episode: $100 million Series C at $900 million valuation - Company status when first featured in 2019. Checker subsequent round: $160 million Series D at $2.2 billion valuation - Raised shortly after appearing on the show. Checker Series E valuation: $4.6 billion - Raised in October 2021 at the market peak. Upgrade valuation before episode: $500 million - Most recent round before appearing in 2019 was a Series C. Upgrade later valuation: $6.3 billion - November 2021 Series F led by DST Global. Upgrade valuation multiple: 12x+ - Jason notes the increase since the podcast appearance. Expanse acquisition price: ~$800 million - Sold to Palo Alto Networks after appearing on the podcast. Expanse valuation before episode: $500 million - Last round before Jason interviewed Tim Junio. Benchling valuation before episode: $415 million - Series C in July 2019 before the podcast appearance. Benchling later valuation: $6 billion - Series F after multiple subsequent rounds. Benchling valuation multiple: 14x - Jason characterizes the rise since the episode. Incitro pre-show valuation: $623 million - Series B led by a16z before the interview. Incitro later valuation: $2.5 billion - Series C in April 2021. Incitro valuation multiple: 4x - Increase after the episode. Cockroach Labs pre-show valuation: ~$800–900 million - Series D before Spencer Kimball’s interview. Cockroach Labs later valuation: $5 billion - Series F in December 2021. Cockroach valuation multiple: 5x+ - Jason summarizes the rise since the show. Loom pre-show valuation: $321 million - Series B before Joe Thomas’s interview. Loom later valuation: $1.4 billion pre-money - Series C in May 2021 led by a16z. Loom valuation multiple: 4x - Increase since the podcast appearance. Divi pre-show valuation: $490 million - Before Adina Hefetz’s interview. Divi later valuation: $2 billion - Series D in October 2021. Divi valuation increase: $1.3 billion in 9 months - Jason highlights the speed of the step-up. Time from 2021 peak to market turn: Q1 2022 - Jason says the party ended as the market crashed the next quarter. Background checks cost: $20 a pop - Jason references Checker’s economics in the interview clip. OpenPhone offer: 20% off first six months - Sponsor CTA repeated during the episode. LinkedIn ad credit: $100 - Sponsor CTA for startup marketing campaign. Kalshi sign-up bonus: $25 - Sponsor CTA for first $100 traded.

Pivotal Quotes: "The party ended. The lights came on. The police showed up. Mom and dad got back from vacation, and the party was over." — Jason: Describing the end of the 2021 funding boom and the market reset. "You can never overpay for a winner." — Jason: Explaining the late-stage venture mindset that drove extreme valuations in 2021. "I think the next year or two, in startup land, is going to be developers and founders playing with AI tools, computer vision, machine learning." — Jason: Ask Jason segment forecasting near-term startup opportunities.

Implications: Listeners should expect a more disciplined funding environment, greater emphasis on revenue and efficiency, and stronger use of AI to build faster. Many 2021-era valuations may remain underwater, while the next breakout opportunities may come from practical AI software.