Snap's Pop and Hedge-Fund Charisma

Snap.

The main worry about tech unicorns is a pretty simple one: Will public stock market investors pay more for tech companies than Silicon Valley venture capitalists? Traditionally the answer has been yes, which is why venture capital can be a business: Venture capitalists invest at lower valuations, then sell at higher ones. I mean it's not as simple as that: The model is that the venture capitalists invest in riskier, earlier-stage companies, and then cash out to the public when those companies succeed. But as companies stay private longer and private fundraisings get bigger, that model has broken down a bit. The recent concern about a "unicorn bubble" has been not so much that tech valuations are universally high, as that private-market valuations have gotten ahead of public ones.