Bleeding Edge

Ahhh … the allure of the Unicorns.

Unicorpses or Unicorns — Unikorns or Rabbits?

What a dilemma…

Maybe this is the year of the Rabbit?

Or is it the year of the Unicorpse?

Or maybe a combination of the two… the double headed donkey?

Never mind that the Chinese want you to believe that this is the year of the Monkey.

For me this is double headed rabbit territory, and although many of these furry critters become roadkill, or get scooped up by the hawks, the owls, and the eagles, or other birds of prey — they still have a greater life span than the Unicorpses they’ve come to replace in our Universe of high valuation StartUps.

Now we are all familiar with Unicorns and the fashion has gotten so bad, that there are at least sixty StartUp companies across our Ecosystem with the word Unicorn, Unikorn, or Unikorns etc, into their names.

Am assuming the Founders want to convey a certain message that they are all clearly fadish and now they are all clearly … dead.

As for the large and surviving ones, they would have to find a new descriptive because Unicorpse is not wearable in polite company, and double headed furry creatures freak out everybody. Then again rabbits are great for the little kiddies, same as for the intellectually challenged, and the poorly educated.

Agreed ?

Right. Or so it would appear to be. Yet reality is another thing altogether. As for quantifiable reality this is a lot different…

Today, there are 152 unicorns — collectively worth over half a trillion dollars. That value of course is Unikorn talk as in imaginary paper estimations, and legendarily skewed or even manufactured fraudulently valuations. And thus apparently this year’s herd of Unicorns has actually grown with more members being admitted to the herd. This year – please make a note of this — the numbers of the Unikorn herd have increased, not decreased.

Among those unicorns are probably many that seriously have gotten ahead of themselves. With 152 animals on the list, there will of course be some masquarades, some flameouts, some slayings, and some bleeders, and those that run against the wall, or drop into the trap of easy money. All of them will face their imminent demise after they run into some serious castle climbing issues too. And some will manage to arrive at the moat and attempt to ford it… except there are crocodiles and aligators lurking in the shallows. And then if they pass the slithering snappers, they have to scale the walls against the dropping arrows, stones, and hot oil and other projectiles dropping for the sky. And so on do forth… — by now, you get the message.

But investors know this rather well when they take the bets and invest, because these are not risk-free bets after all.

Then, there will be those companies that wear masquarade to look-like unicorns and are trying to fit into the herd, but in reality they are just spoofs. They are in reality just plodding horses, painted white, and sporting a fake horn, super-glued on their nose. Companies like Jawbone, Dropbox, Wework, Theranos, Evernote, and a whole bunch of others, which I had publicly stated that they were vastly overvalued, already more than a couple of years ago. And when twelve months ago I alerted investors that based on our data and metrics these were mere kiddie ponies and are gonna start falling form the sky — everyone got up in arms.

Folks got alarmed and started shouting, and derided my research as clickbait and described me much less kindly terms, because Dropbox had “superior, cleaner, scalable user acquisition that’s built on self-serve” versus Box. And Wework is not another rental space agency with real estate assets to boot. Your corner Century 21 real estate office is way hotter than Wework, when you look past the hype and fashion of the young potheads working there, and you take a dive in the real financial data of their operations. Even their slide deck used for investors smells of dishonesty.

As for my diatribe on Theranos — boy was I attacked. I was vehemently attacked by feminists, by VCs, by wannabes, and even by blonde airheads in compromising moments when we had more serious work to do and suck face and get fluids to exchange. And all of these attacks because I told the truth that Theranos tests were not working. Sure we now know that and we had the FDA to tell us, whereas before my announcement all the Investors were willfully blind because Elizabeth is a woman. And she is a blonde woman. And because I wrote that she is a woman that can walk and talk… but not much else beyond that — all hell broke loose.

I don’t understand. But now the Theranos investors are left holding a sizable horn trying to figure out what to do with it, and where to put it…

I could suggest a good place… but not to this sensitive and politically correct crowd.

Fancy that…

So when I say that the data on the private-public market disconnect is real and scary for the coming slaying of the Unikorns — you’ve got to believe that they will be survivors to carry the gene forward.

And while the travails of the Theranos, the Wework, the Dropboxes and the Evernotes and the Jawbones, or the other Unikorns, of the world are definitely notable and newsworthy, there are also many future S&P 500 companies among these 152 still viable to some extent unicorns, that are fast converted to Unicorpses or Rabbits.

It’s a choice to do one or the other. But you cannot be both. And staying in the Unikorn pool is not sustainable either, because that’s where the predators come to drink and if they see you in their watering hole — they will kill you and eat you before you had a chance to run away.

So while it’s true to claim that some percentage number of unicorns will falter and fail in 2016 — our thinking must not lose sight of the fact that 2016 may force many of the surviving unicorns to become RABBITs and escape the common fate for now.

Am presuming you can all figure out what a Unicorpse means…

But because nobody yet knows what a rabbit is in our Startup parlance, here is a short primer:

Besides being an adorable furry little critter that hops around and poops everywhere and makes it’s presence known by wreaking havoc in your vegetable patch — the rabbit is also tool of extreme female pleasure because it has two ears or something like that…

But we digress.

The rabbits we are talking about here are StartUp companies that kill it.

A RABBIT is made up of these traits: R – Real, A – Actual, B – Business, B – Building, I – Interesting, T – Tech , etc.

Thus in my estimation, 2016 will be the year of unicorpse rabbits, because it is the year we separate the RABBITs from the unicorns. So we christen 2016 as the year of the RABBIT, and we will slowly try to christen our Unicorns and turn them into rabbits. As if this is doable or even possible….

But please do not be alarmed.

Do not be afraid.

Do not run for your bong… or your crack pipe.

Do not even worry about running out of crack or pot or whatever the hell substance you were smoking when you were making these investments at stratospheric valuations for the Unicorns that deliver your lunch sack, or the app that brings you a cab because you don’t know how to whistle to catch a Taxi.

No worries. Don’t get paranoid on me now.

Everything will be A-OK.

Trust me on that because in my super secret Genetics laboratory we are working feverishly to create the new hybrid animal that will answer all your prayers.

Editing and copy pasting the DNA gene pair sequences that are necessary to do this is hugely expensive and hard work — yet we will do all we can to save your from your addiction to crack & pot smoking and subsequently investing.

Your addiction is worse that drunk dialing for booty calls or even drunk emailing for booty…

But we have great CRISPER geneticists and other assorted scientists working on the subject and I can now announce that they will surely create another mythical animal for your instant portfolio growth and your peculiar investing gratification.

And after months of Herculian labors we have succeeded…

Here it is:

So let’s take a running tally now that we have the new species to throw money at…

Now because of the Rise of the Unicorpse RABBITs we will give all those hard working companies a better bet at success and will empty the pockets of all the other foolish investors out there who prefer to invest on mannequins rather than solid founders.

And now that nobody remembers the Tulip mania anymore — we have a UNITULIP species of company that we’ve been working on in our secret laboratory too.

More on that later…

So how many dead unicorns or unicorpses will we see this year?

This question intensified after the Q4 drop in VC funding & deals, and the decimation of the Unikorns, in Q1 of 2016 as evidenced of transactions in the secondary illiquid markets for non public Founder stock — but still there is no real answer. Mainly because unicorns have large cash stockpiles and still there are some greater fools to be found amongst the VC class and the Private Equity spankers.

Yet it is expected that a vast majority of the unicorns who cannot access the Public Markets will die off, get eaten (absorbed in large Cos), or burn out in their attempt to re-enter our humble oxygen rich atmosphere.

But there is no grasslands, forests, hill-country, or watering hole, safe enough for these fallen Unikorns on our humdrum earth today. So they have to find their place in the land of imagination and magic. Maybe there is a casting call for the next Harry Potter movie but that position will employ only one of those magical beasts…

The rest of them will surely have to go to the bread lines and enter the unemployment rolls. No worries there are charitable individuals still left out there who can take a hungry unikorn in the stable and feed it, and maybe nurse it back to health. I for one might just do this and will open a reform school for errant Unicorns.

Who knows how this whole thing will turn out. But one thing is for certain — we are witnessing an extinction event.

And again the basis for my research is how the Founder Stock is trending now in the secondary markets.

Feeling lucky?

Right?

Or wrong?

Yours,

Pano

PS:

Here is the deal:

I’ve got some Founders stock to sell in the majority of these Unikorns and am willing to deal…

I’ll take your call but no puts, or options.