by Kevin Schofield
After last week’s interesting but depressing column looking at the leading causes of death in the United States, I promised South Seattle Emerald publisher and editor Marcus Green that this week’s column would be on a lighter note. Or, as Marcus jokingly put it, “unicorns and popsicles.”
Ask, and ye shall receive.
There are 635 unicorns in the world … but not the kind you’re probably thinking of.
In the venture capital world, a “unicorn” is a privately-held company that is worth more than $1 billion. A web site run by CB Insights keeps a running list of all the known unicorns, and as of this month their list includes 635 companies.
It’s an interesting list, and scrolling through it gives you a sense for the state of venture capital in the world: the unicorns are concentrated in the United States and China, with smatterings in India, the United Kingdom, and southeast Asia. As one might expect, it’s heavy on technology companies, though there are a few outliers such as SpaceX and Juul.
Unicorns are special because most companies become publicly traded before they get that big, so that the initial investors can cash out some or all of their stock holdings. Some unicorns remain private because they are owned by a single individual or a family that wants to keep it that way. But most have dozens (if not more) private shareholders by the time they get to that size, and are now engaged in a delicate, complicated dance as they try to work out the best timing to “go public.” Publicly traded companies are required to be much more transparent about their operations and finances; they also potentially lose control over the company, since anyone can buy the stock on the open market. But much of the timing comes down to one question: when will going public maximize the value of the stock?
That question brings us back to the mythical nature of unicorns: their value. There are several ways to calculate the value of a company, including its “book value” (assets minus liabilities) and projections of its future income. But the most common one is “market capitalization,” or the number of shares in the company multiplied by the value of each share. Market capitalization is easy to calculate for a publicly traded company, since both the total number of shares and the share price are public information. But it is much more difficult to calculate for a privately held company. During the earlier years of a startup, it might raise money by selling a portion of the company to an “angel investor” or a venture capital firm in a private transaction. The most recent of those transactions is typically used to place a value on the whole company. For example, if a company sells 10% of itself to an investor for $100 million, that makes the entire company worth $1 billion — at least according to that buyer.
The problem with that approach is that in between private transactions, no one has any idea what a unicorn is really worth. Many of the 635 unicorns on the list haven’t raised any additional money since before the pandemic, so no one has even tried recently to place a value on them. It’s the finance equivalent of Schrödinger’s Cat: until a transaction happens that forces someone to place a value on the company, it could be worth any amount. Over half of the companies on the list are currently valued at $2 billion or less, but it’s fair to assume that many of them, if put to the test, lost their “unicorn” status over the past year. Of course, there are also many companies that have grown in the past year, and there are sure to be some new unicorns that just haven’t formally made it onto the list yet.
Like all good products, the Popsicle has a fun creation myth. As the story is told, Popsicles were the accidental invention of 11-year-old San Franciscan Frank Epperson in 1905, when he accidentally “left a mixture of powdered soda, water, and a stirring stick in a cup on his porch. It was a cold night, and Epperson awoke the next morning to find a frozen pop.” Eighteen years later, Epperson patented his invention. He eventually ended up in court with the Good Humor company, which held the patent on ice cream on a stick. They settled their dispute by dividing up the territory: Epperson could only make frozen desserts from water, and Good Humor would stick to ice cream — though Epperson later pushed the boundaries by making Fudgesicles from ice milk.
According to the legend, the Popsicle name was coined by Epperson’s kids, a shortened version of “pop’s icicle.”
Epperson’s patent has long since expired, which is why there are so many knock-offs in oh-so-many flavors. Including, apparently, avocado.
Popsicles, or at least the two-stick kind, come with their own logistical and moral quandary: do you break the two sticks apart and share, or do you try to eat the whole thing yourself and risk either brain freeze or a big goopy mess all over your hands? Discuss among yourselves.
Most Christian denominations celebrated Easter last Sunday, which means that the Peeps have once again invaded our homes. And like Popsicles, Peeps have their own unique confectionary history.
Peeps are made by the Just Born company and have been since 1953, but the origin of the marshmallow chicks dates back at least ten years before that to the Rodda Candy company of Pennsylvania. Originally Peeps were hand-made, created in limited quantities during the Easter season — company founder Roscoe Rodda’s way of carving out a specialty market he could own while existing perilously in the shadow of the nearby Hershey chocolate empire. But things really took off in 1953 when Just Born acquired Rodda.
Just Born was founded by Russian Jewish immigrant Sam Born, who in 1910 brought with him to the United States his knowledge of the family chocolate business. Born also had a knack for inventing: in 1916 he created a stick-inserting machine for lollipops. After Just Born bought Rodda and with it the Peeps franchise in 1953, Sam’s son invented the “Depositor,” a machine that could squeeze out 30 Peeps at a time. The Depositor was the heart of the Peeps operation for sixty years, until it was finally replaced in 2014.
Nowadays, Peeps are made in a rainbow of colors, all year round. And yes, if you microwave one, it will explode. It will also make your mom/significant other/appliance store salesperson very angry, so proceed at your own risk.
Kevin Schofield is a freelance writer and the founder of Seattle City Council Insight, a website providing independent news and analysis of the Seattle City Council and City Hall. He also co-hosts the “Seattle News, Views and Brews” podcast with Brian Callanan, and appears from time to time on Converge Media and KUOW’s Week in Review.
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