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Stop hunting unicorns and start aiming at Zebras

Sifted | Johannes Lenhard | Feb 4, 2021

Zebras not unicorns - Stop hunting unicorns and start aiming at Zebras

VCs, LPs and governments need to change their ways if they want to create and fund businesses that will make the world a better place. Here’s how they can do that.

When a Pulitzer Prize-winning journalist turns their attention to you in the New Yorker, you must have done something terribly right — or wrong. Back in November, a bunch of VCs found themselves in this situation. The writer, Charles Duhigg, chastised them for not only neglecting their oversight responsibilities on startup boards, but also for chasing the wrong kind of company: the mythical unicorn.

See:  Detour: An altered path to profit for European fintechs

From WeWork to Uber, it turns out that quite a few of these $1bn-plus businesses are in fact full of hot air.

Investors should stop hunting these mythical creatures and search for another one instead: enter the “green zebra”.

How the zebra got its green stripes

The zebra model — a term coined by the now-international collective Zebras Unite in 2017 — is thought to be a more solid, more founder-driven alternative to building a unicorn.

These are companies that, instead of seeking to blitz-scale their way to market dominance, fuelled by multiple venture capital fundraising rounds, prioritise profitability. Zebras also tend to be focused on equitable ownership and building sustainable businesses, and they seek to create a positive social impact, for example by providing solutions for underserved markets or prioritising employee happiness.

I believe the next generation of companies following this model will not only operate on zebra principles, but environmental, social and corporate governance (ESG) ones. They will be green zebras, and green in the widest sense of the word: more inclusive, ethical, thoughtful and sustainable. They will raise capital by showing that commercial opportunity goes hand in hand with sustainability and impact — and the current cleantech boom is only the tip of the iceberg here.


Some of European wunder-companies, from electric air-taxi company Lilium to Berlin’s vertical farming champions InFarm, have been able to demonstrate this opportunity to investors.

But what if we wanted to see a whole generation of these green zebra companies, which work on responsible and sustainable solutions to big problems? What in the structure of venture financing would have to change?

How VC can nurture more green zebras 

Here are three suggestions:

1. VCs need to embrace ESG principles themselves

How are you going to properly support a portfolio company that is driven by ESG principles if you’re not putting them into practice yourself? At the moment, the number of funds that explicitly apply these criteria is extremely small. But there is increasing pressure from founders (of zebras and beyond), employees and consumers to do so. The forerunners — such as Antler, 500 Startups and Balderton, which have come out with explicit ESG initiatives already — will also be the ones that green zebras gravitate towards, and stick with. These initiatives are a good start in signalling that a firm is about more than just quickly maximising returns for stakeholders.

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