Brian Nichols is the co-founder of Angel Squad, a community where you’ll learn how to angel invest and get a chance to invest as little as $1k into Hustle Fund's top performing early-stage startups

Aileen Lee did not invent the billion-dollar startup. She invented the name for it, and more importantly, she built a dataset around the phenomenon at a moment when most people were treating venture investing as pattern-matching and gut instinct rather than systematic analysis.

Lee spent 10-plus years at Kleiner Perkins before founding Cowboy Ventures in Palo Alto in 2012. At KPCB she worked hands-on with companies from Series A through IPO, including Bloom Energy, Rent the Runway, and Trendyol, which was later acquired by Alibaba. She was also founding CEO of KPCB-backed RMG Networks, a digital media company, giving her operating experience that most investors at her level never develop.

The Unicorn Paper and What It Actually Said

In November 2013, while starting Cowboy Ventures, Lee published "Welcome to the Unicorn Club: Learning from Billion-Dollar Startups" in TechCrunch. The piece analyzed all US-based, VC-backed companies founded between 2003 and 2013 that had reached $1 billion or more in private or public market valuation. She found just 39 companies in a decade of venture activity. She called them unicorns to capture how rare they were.

The paper's most useful findings got buried under the brand power of the term itself. The average age of founders was 34, not 22. Most unicorns had two or more co-founders. Enterprise companies showed 2.4 times better capital efficiency than consumer companies. The majority had exited through acquisition or IPO rather than remaining private.

Angel Squad members studying what separates billion-dollar outcomes from merely good companies can learn a lot from that original analysis. The rigor behind the label matters far more than the label.

In January 2024, Lee published a 10-year follow-up examining what happened to the unicorn herd that had grown to over 1,200 companies by then. Her findings were sobering: around 40% of companies on the list were trading below $1 billion in secondary markets, many had become "zombiecorns" generating revenue but unable to raise or exit, and some had become outright "unicorpses." She coined those terms too.

The Cowboy Ventures Portfolio and Thesis

Aileen Lee investments at Cowboy Ventures focus on seed-stage companies building what she calls "Life 2.0" technology: products that re-imagine work and personal life in large, growing markets. The fund is deliberately small, which allows it to target top-quartile returns without needing portfolio companies to reach $10 billion valuations. The fund structure is itself a strategy, as Lee has quoted Fred Wilson on this point directly.

Portfolio companies include Dollar Shave Club, which was acquired by Unilever for $1 billion in 2016; Crunchbase, the data platform used across the venture industry; Textio, the augmented writing platform; Accompany, the relationship intelligence company; Tally Technologies, the personal finance app; and Spruce Health. The firm backs approximately one company per month across a given fund cycle.

The Mustang Fund structure is a separate vehicle that allows Cowboy to double down on its highest-conviction breakouts without distorting the primary seed fund. It is a clean institutional solution to the problem of portfolio construction that most small funds handle messily.

The fund size discipline is instructive for Angel Squad members building their own portfolios. Keeping a portfolio concentrated enough to matter, while maintaining reserves to follow on into winners, is one of the hardest operational problems in early-stage investing. Angel Squad members work through that challenge alongside Hustle Fund GPs who have deployed across hundreds of companies. See how at hustlefund.vc/squad.

All Raise and the Diversity Mandate

In 2018, Lee co-founded All Raise, a nonprofit she started by writing an email to a group of women in venture capital. The organization grew into a collective of over 30 VCs advocating for increasing the number of women investing and the amount of capital flowing to women-founded companies.

Elizabeth Yin of Hustle Fund has been consistent about the importance of building investor communities that surface deal flow from underrepresented founders. Angel Squad's community of 2,500-plus investors across 50-plus countries reflects that same commitment to democratizing who gets to participate in early-stage investing. The more diverse the investor base, the more diverse the deal flow, and the better the collective portfolio. Learn how at hustlefund.vc/squad.

The AI Moment

Lee has spoken publicly about investing in AI-enabled companies from Cowboy's current fund, particularly enterprise software with AI integration. Her 2024 unicorn update noted that enterprise-oriented companies continue to show better capital efficiency than consumer companies, a finding consistent with her original 2013 analysis. Her writing and public commentary has made Cowboy one of the most visible seed funds in an era when visibility drives deal flow.

She was named to Time's 100 Most Influential People in 2019 and has appeared on the Forbes Midas List for multiple years. The unicorn paper is still cited regularly in investor presentations more than a decade after publication.