Untamed Unicorns
The definitive account of the harms that have come from deregulating venture capital financing and allowing startups to become gigantic while remaining private.
The term “unicorn” for a private startup company worth $1 billion or more was coined to emphasize the rarity of such ventures. But today there are more than 1,500 of them, with a combined valuation of over $4 trillion. By remaining private, these corporate behemoths shield themselves from disclosure requirements, investor oversight, and market discipline—mechanisms designed to protect investors and the public from corporate wrongdoing. It’s no coincidence that in recent years, a number of prominent startups have been the sites of founder misconduct and fraud. This wave of startup scandals exposes significant problems with the venture capital financing model and the deregulation that helped fuel the industry’s explosive growth.
Untamed Unicorns connects the most dramatic startup scandals, including FTX, Theranos, WeWork, and Uber, to structural flaws in the startup financing model. Detailing the deregulatory reforms implemented by Congress and the Securities and Exchange Commission over the past 40 years, it shows how these have eroded core safeguards of securities law that were first established during the New Deal era.
As Renée Jones makes clear, allowing unicorn companies to run wild doesn’t threaten only the sophisticated venture capitalists who finance Silicon Valley. When the largest startups go awry, the consequences are often severe for ordinary investors, employees, and the public at large. Revealing the risks inherent in the current system, Untamed Unicorns presents a roadmap for reform to restore proper boundaries between public and private securities markets.
Authors
Renee Jones
Reviews
Untamed Unicorns offers a rigorous analysis of how the traditional boundary between public and private markets has eroded, allowing large companies to operate beyond the disclosure and governance frameworks of the federal securities laws. Drawing on legal history, doctrine, and a close study of recent market failures, Renée Jones reveals how incremental regulatory changes have weakened market discipline and accountability. Importantly, Jones also proposes a coherent roadmap for reform, aimed at restoring transparency, oversight, and meaningful controls on private-market exemptions. It is a significant contribution to ongoing debates over securities regulation, and I commend it to policymakers and market participants alike.
With Untamed Unicorns, Renée Jones provides a clear explanation of how industry-driven deregulation created the conditions for spectacular failures of giant Silicon Valley startups. This essential book, replete with details and drama, gives us a comprehensive picture of what’s gone wrong, who has been hurt, and what to do about it.
Renée Jones is the perfect guide to issues surrounding America’s key sources of funding for startup companies. Her legal and policy expertise is unsurpassed, both as a scholar and as the former chief regulator of capital formation in the United States. In this penetrating and timely new book, she both diagnoses the problems with venture capital financing and proposes insightful cures. Untamed Unicorns is essential reading for policymakers and for anyone seeking to raise money for a new business in this country.
Untamed Unicorns provides an outstanding review of current private finance, focusing on the billion-dollar private companies that have come to dominate the world of startups. Renée Jones persuasively makes the case that this dominance is the result not of genius entrepreneurs or breakthrough products, but rather of the way that Congress and the SEC have eviscerated regulations designed to protect investors, employees, and the public. Examining such leading dysfunctional companies as FTX, Theranos, Uber, and WeWork, Jones offers thoughtful proposals to reform this aspect of our wayward financial system.