A unicorn is more than a valuation milestone — it’s the shorthand for a startup that scaled product, market, and capital into a company with the potential to reshape an industry. Founders chase unicorn status because it signals transformational scale: market leadership, durable revenue streams, and the power to attract top talent and partners. But unicorns are rare, expensive to pursue, and the path is littered with companies that ran out of capital, misread their market, or scaled the wrong things.

This article asks a practical question: What do investors and founders look for in startups likely to become the next unicorn? We’ll use the Forbes “Next Billion‑Dollar Startups” 2024 list as a diagnostic lens — that list has a strong track record of calling future unicorns — and then extend the analysis into 2025, naming promising contenders and offering five tactical, founder‑focused tips for building unicorn‑worthy businesses.

Two caveats before we begin: (1) valuation is a lagging metric — what matters to VCs is the predictability of growth and durability of business economics; (2) there’s no single recipe — but there are repeatable signals investors prize (timing, traction, unit economics, team, and defensibility).

The Forbes 2024 list: what it tells us (and why it matters)

Forbes’ annual “Next Billion‑Dollar Startups” series selects 25 venture-backed companies it judges most likely to reach $1 billion. The list is assembled from nominations, input from venture firms and TrueBridge data, and editorial analysis of growth signals. Forbes’ editorial summary of the 2024 edition emphasizes the influence of AI across the cohort: “Artificial intelligence dominates this year’s list of 25 venture‑backed startups we think most likely to reach a $1 billion valuation.”

That selection process is meaningful because the list has a long track record. Forbes reports that “Of the list’s 225 alumni, 131, or 58%, became unicorns, including DoorDash, Figma, Anduril, Benchling, and Rippling.” That hit rate (over 50%) across a decade is unusually high for prediction exercises and makes the Forbes list a useful empirical starting point for learning what signals correlate with unicorn outcomes.

Key takeaways from the 2024 list (and what VCs were implicitly rewarding):

Sector timing matters. AI and adjacent software platforms dominated 2024 nominations because investors saw accelerated adoption and revenue potential.

Revenue signal matters more than shiny growth. Forbes and its data partners prize companies showing meaningful ARR or repeatable revenue growth, not just eyeballs.

Capital efficiency and team composition matter. Founders who can show efficient scaling — hitting revenue milestones without burning outsized capital — are prioritized.

Taken together, the Forbes list encodes what many institutional VCs reward: alignment of market timing + proof of widespread customer adoption + clear path to durable revenue. That formula, as we’ll show, is still central in 2025.

Why winners on that list thrived (and why others didn’t)

Looking at Forbes alumni and the companies that didn’t make it, patterns emerge across several dimensions.

Timing — being in the right market wave

Seizing a fast-growing market is the most obvious lever. AI’s maturation in 2023–24 created a wave of demand for AI‑first applications — from developer tools to content & document automation. Companies that launched at the cusp of a demand inflection could grow adoption far faster than incumbents that tried to bolt AI on much later. Forbes’ observation — AI dominated the 2024 list — reflects this.

Traction and monetization — revenue beats virality

Investors increasingly expect real unit economics. The Forbes selection favors startups with clear revenue signals (early ARR, enterprise pilots converting to paid accounts) because valuations must ultimately rest on cash flows, not promises alone. As Forbes notes in the description of their selection criteria and past alumni, this focus on revenue correlates with later unicorn outcomes.

Founder-market fit and leadership execution

Founding teams that deeply understand their domain and can iterate their product rapidly outperform those who pivot aimlessly. VCs often say they invest in teams as much as ideas; credibility and the ability to hire top talent follow credible founding narratives.

Capital discipline and operational maturity

Many startups fail because they scale headcount and burn before demonstrating repeatable revenue. Conversely, those that prioritize unit economics and deliberate hiring preserve optionality and survive downturns. We’ll return to this with a concrete example below.

Examples that illustrate the contrast

1. Winners: DoorDash and Figma (Forbes list alumni turned market leaders) grew by solving a painfully clear problem (delivery logistics; collaborative design) and then building monetization that scaled. Forbes highlights these alumni as part of the list’s success track record.
   
   
2. Cautionary tales: Some hardware and capital‑heavy startups promised outcomes but failed to reach broad adoption before capital ran out — a reminder that some markets require different playbooks (partnerships, long sales cycles, or nontraditional financing).

Case study — Anysphere (Cursor): lessons from a runaway AI success

One of the most instructive 2025 success stories (and a vivid demonstration of 2024–25 dynamics) is Anysphere, creator of the AI coding environment Cursor.

The headline story: In mid‑2025, Anysphere raised a large round that took its valuation near $9 – 9.9 billion, driven by explosive ARR growth and high developer adoption. The Financial Times characterized the rise: “Maker of AI ‘vibe coding’ app Cursor hits $9bn valuation.”

Why it matters for founders:

1. Product-market fit at scale. The cursor focused on a clear, high-leverage user (software developers) and solved immediate pain (productivity in coding workflows).
   
   
2. Rapid, revenue-driven scale. Multiple outlets report Cursor’s ARR growth and enterprise adoption as core reasons investors doubled down. FT and TechCrunch reported ARR and adoption metrics during 2025 funding coverage.
   
   
3. Hiring and operational learning. CEO Michael Truell candidly reflected on early hiring missteps: “We tried to be incredibly patient on the hiring front … I think we actually hired too slow.” That quote, reported in Business Insider, sums a common founder error: hiring too slowly can starve growth; hiring too quickly can wreck culture and capital.
   
   

What founders should extract: Even in AI, execution and operational learning matter. Rapid user growth must be matched with deliberate hiring, customer success, and pricing that converts trials into ARR.

What matters in 2025 — investor expectations and market realities

VC expectations evolved notably between 2021 – 2025. Here’s the practical picture for founders in 2025:

Investors want credible pathways to revenue

While seed checks still fund experimentation, later‑stage investors increasingly ask for unit economics that scale. They want to see predictable revenue, meaningful retention, and lead indicators (expansion revenue, net dollar retention) consistent with future growth.

AI means higher expectations for defensibility and integration

AI applications are plentiful; the differentiator is how a product integrates into a customer’s workflow and how defensible its data/models/integrations are over time. VCs are asking whether a startup has sticky integrations, unique data moats, or network effects.

Capital efficiency is a survival trait

Many investors value startups that show growth with less dilution. Examples like Anysphere illustrate that fast‑growing ARR can justify aggressive valuations, but those valuations still hinge on sustainable adoption, not hype. FT reporting showed how investor attention shifted from large foundational AI model plays to application and productivity layers like Cursor.

Talent and culture still win

VCs read teams for their ability to recruit and keep top engineers, leaders, and operators. Hiring decisions (who you bring on and when) frequently determine whether growth will accelerate or sputter.

Global & regulatory context

Founders targeting regulated sectors (healthcare, fintech, energy) must demonstrate compliance rigor early. Market access and regulatory navigation can become competitive advantages — or devastating bottlenecks if underestimated.

Who might be the next unicorns (2025 watchlist)

Predicting unicorns is inherently uncertain, but based on traction, sector tailwinds, and funding signals, several startups warrant close attention in 2025.

Anysphere (Cursor) — AI developer tooling

We’ve already dissected Anysphere. Key evidence of unicorn status: large funding rounds, reported ARR acceleration, and a rapidly expanding user base. Reporting across FT, TechCrunch, and Business Insider documented both its valuation leap and CEO reflections.

"Many people you hear hired too fast. I think we actually hired too slow," …Michael Truell.

That reflection is instructive for founders on pacing hires.

Owner.com — vertical SaaS for restaurants

Owner.com (a company often described as “Shopify for restaurants”) raised a $120M Series C in 2025 and reached a $1B valuation, a clear signal investors see durable unit economics in restaurant SaaS. Owner’s own Series C memo states: “Our Story … Within 6 days of opening our data room to a small group of investors, we had 6 offers to lead our Series C.” That is a concrete articulation of investor demand and signals strong market fit and sales motion.

Why Owner.com matters: vertical SaaS that helps SMBs reduce third‑party delivery fees and own customer data addresses a structural pain point in a huge market. Bloomberg and Forbes covered the round and valuation.

Other sectors to watch (broadly)

1. AI applications in knowledge work (document automation, legal, finance) — because enterprise buyers want to boost productivity.
   
   
2. Creator economy infrastructure and monetization platforms — tools that help creators own revenue (subscriptions, commerce).
   
   
3. Climate-tech & energy storage with credible paths to commercialization — where policy tailwinds and corporate procurement can create big markets.
   
   
4. Healthtech platforms that lower delivery cost — but only if they solve reimbursement and regulatory complexity.

For each of these, the recurring signals are: clear revenue pathway, defensible customer integration, and measured capital usage.

Why some contenders are different — the mechanics of advantage

What distinguishes startups that will make a Forbes‑like list from the rest? There are recurring elements, some technological, some operational, and some narrative-based.

Real customer reliance (and measurable ROI)

Top contenders show not only product usage but measurable business outcomes for customers: reduced cost, increased revenue, time saved. That’s what allows customers to justify subscriptions and creates expansion revenue.

Repeatable sales motion and scalable distribution

Marketplaces and consumer apps sometimes grow virally, but sustainable unicorns often have repeated sales processes that scale — whether outbound enterprise sales, channel partnerships, or high‑velocity self-serve funnels.

Data and ecosystem defensibility

Many AI startups win because their product becomes embedded in a workflow and they accumulate proprietary signals (usage data, labelled interactions) that competitors cannot readily replicate.

Founder credibility and storytelling

VCs invest in believable futures. Founders who can narrate the problem, the plan to capture it, and show a credible path to ARR make fundraising cheaper and faster.

Deeper founder challenges — what breaks startups on the way to unicorn

Scaling to a billion dollars in valuation is a learned craft. Below are persistent difficulties founders face — and the concrete ways successful founders avoid them.

Mistimed product-market fit

Mistake: assuming a problem is big without validating willingness to pay. Solution: run early paid pilots that tie usage to revenue. Startups on the Forbes list often had paying customers before their big rounds.

Hiring too early — or too late

Both are fatal. Hiring too early burns cash; hiring too late starves growth. Michael Truell’s quote about hiring too slowly captures this tension: “We tried to be incredibly patient on the hiring front … I think we actually hired too slow.” That misstep delayed Cursor’s scale; the correction was deliberate hiring aligned with product milestones.

Poor unit economics masked by growth

Growth without margin leads to poor survival odds in capital-scare environments. Investors look for early signs that a company can monetize sustainably.

Regulatory and compliance misread

Startups in healthcare, finance, or energy that underestimate regulation can trigger costly pivots. Those that engage compliance early convert compliance from a blocker into a moat.

Pricing and monetization mistakes

Poor pricing that fails to capture customer value slows revenue even if usage grows. Benchmarks: many SaaS unicorns crossed meaningful ARR thresholds (e.g., $10–50M ARR) before large late-stage raises — demonstrating pricing consistency matters.

Five action‑tested tips to build a unicorn‑worthy startup

Below are five concrete, tactical pieces of advice distilled from patterns across the Forbes list, Anysphere, Owner.com, and investor feedback.

Tip 1 — Choose a high‑leverage market and prove the value early

Pick a market where a small improvement for customers yields large value (developer productivity, profit margin improvement for restaurants, document automation for legal teams). Test willingness to pay early through pilots and low friction paid offerings. The Forbes selection process ranks companies that show early revenue signals — not just engagement.

Action step: Run at least three paid pilots in your first year that tie product improvements to measurable customer KPIs (time saved; revenue uplift; cost reduction).

Tip 2 — Be ruthlessly capital efficient while building predictable growth

VCs reward capital efficiency. Structure experiments with econometric rigor: know CAC, LTV, payback, gross margins. Avoid “grow at any cost” if you can test cheaper growth channels.

Action step: Maintain a rolling 12‑month cash plan; require any new hire costing >X to have a 6‑month impact plan that links to revenue or product velocity.

Tip 3 — Hire deliberately: build the core team that scales your category

Hiring is strategic. Hire for the roles that unlock the next step (e.g., head of enterprise sales after product-market fit, customer success before enterprise expansion). Michael Truell’s reflection about hiring timing shows founders must continually calibrate hiring pace. Learn to hire when the metric warrants the position.

Action step: Tie hires to KPIs: hire when a role’s absence predicts missed targets (e.g., hiring a sales lead when 3+ pilots are converting but pipeline churn is bottlenecked).

Tip 4 — Build defensibility into product design (data, integrations, workflows)

Especially in AI, defensibility comes from unique data, APIs, and integration depth. The more your product is embedded in customer workflows, the stickier it becomes.

Action step: Design at least one integration with a major platform your customers already rely on; capture consented data that can fuel model improvement.

Tip 5 — Craft a credible, measurable narrative for investors (vision + evidence)

VCs want both vision and evidence. Your pitch should present a clear 3‑5 year market map and, crucially, evidence: conversion rates, early ARR, retention cohorts, and references from early enterprise customers.

Action step: Create a “Board Packet” style one‑pager that shows traction metrics, key hires needed, and five customer testimonials. Use that document to open conversations with later-stage investors.

A checklist for founders who want to be unicorn‑ready (practical rollup)

1. Do you have at least one strong revenue proof point (paid pilot, ARR > $1M, strong renewal rates)?
   
   
2. Can you demonstrate customer ROI in dollars?
   
   
3. Is your hiring plan tied to measurable milestones?
   
   
4. Do you have a defensible position (data, integrations, regulatory expertise)?
   
   
5. Can you tell investors a credible five‑year revenue trajectory with unit economics?
   
   

If you can answer “yes” to most of the above, you’re speaking the language investors expect when looking for the next unicorn.

Conclusion — the predictable unpredictability of unicorns

Unicorns are simultaneously rare and learnable. The Forbes 2024 list gives founders a heuristic: be in a fast-growing market, show real revenue, recruit the right team at the right time, and build defensibility. That formula is not new, but the details change — in 2025, AI is a core ingredient for many winners, while capital efficiency and enterprise adoption remain universal prerequisites.

If you’re a founder building for big outcomes: focus less on a valuation headline and more on building the durable signals that lead to it — repeatable revenue, measurable customer ROI, and a disciplined growth engine. Aim to be the company investors can credibly project forward from today’s numbers to a billion-dollar future.

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