In the past year, we have seen many “unicorns”—startups described as having private valuations over one billion dollars—hit the ten-year mark and reach important inflection points. They have defied existing corporate theory by growing to a large size with ownership shared between founders, investors, and employees. Record-breaking amounts of capital have flowed into these and thousands of other startups.
With their focus on technology and innovation, and correspondingly high levels of risk and emphasis on growth, startups generally have a different style of governance from both public corporations and traditional closely-held corporations. In a forthcoming article, I aim to provide a comprehensive framework for understanding the unique combination of governance issues in venture-backed startups over their life cycles.
