How we created a $10 unicorn:
How did we create a unicorn?
Step 1: Incorporate a company with 1,000,000,000 shares outstanding and a nominal amount of paid up capital. In our case we had $4 of paid up capital with 250,000,000 shares outstanding. Implying a price per share of $0.000000016
Step 2: Register and file all required constitutive documents - i.e. Articles of Association, Constitution, etc.
Step 3: Find someone to purchase 1 share at a nominal amount such that the fully diluted valuation of the company (Shares outstanding x price per last share) is $1,000,000,000. In our case we spoke to some our friends who wanted in on the fun to purchase 1 share each at $4 price per share. So our fully diluted shares outstanding is 250,000,003 with the latest price per share at $4. Our on-paper valuation is now $1,000,000,012.
Step 4: File updated share purchase agreements and constitutive documents to lodge the updated cap table.
Et Voila! You now have a unicorn!
The only things that matter in early stage VC rounds are a) Cash In, b) Dilution, and c) Runway.
For us, we raised $12, with 0.0000012% dilution. Given that we have annual filing & registration costs, we have <12 months of runway. (It's worth noting this is common practice because much of VC investment is oriented around the idea of what the team will create in terms of future value via technological development.)
Does being a unicorn really mean anything here? :)
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