Unicorns, gazelles and other distractions

Question 1

What are Unicorns defined as in the context of new venture creation? (Aldrich and Reuf, 2018)

Answer 1

Start-up business with a stock market value of at least 1 billion dollars

Question 2

What are Gazelles defined as in the context of new venture creation? (Aldrich and Reuf, 2018)

Answer 2

High growth companies that increase revenues of 20% annually

Question 3

What are Black Swans defined as in the context of new venture creation? (Aldrich and Reuf, 2018)

Answer 3

Rare events, especially those that are random and unexpected

Question 4

What are the consequences of the misplaced focus on Gazelles and Unicorns? (3) (Aldrich and Reuf, 2018)

Answer 4

1. It introduces a strong selection bias into research
2. It perpetuates the idea that liquidity constraints are a major barrier to entry
3. Limited understanding of diverse motivations and behavior

Question 5

What is the consequence of the selection bias? (Aldrich and Reuf, 2018)

Answer 5

By selecting only the high growth firms there is a trend of higher growth the more risk a venture takes, if you select all the entrepreneur there is high and low growth across the risk taking axis.