Yahoo Finance

Unicorn startups — or startups with a reported valuation above $1 billion — have become so ubiquitous that a 2017 report by Stanford professor Ilya A. Strebulaev and University of British Columbia professor Will Gornall estimates that their combined valuation totals over $700 billion.

Despite the investing hopes of the overzealous venture capitalists who created this trend, Strebulaev and Gornall's study reveals a startling truth: A venture-capital-backed company's post-money valuation — which Strebulaev and Gornall define as the most recent price per share multiplied by the number of common shares — is absolutely not equal to its equity value.

Because venture-backed unicorns issue all kinds of different shares with different terms, we can't assume the same value for all shares as we can for public companies with one class of share. This trend leads to a startling number of companies with an increasingly high overvaluation, or a stock price that's not justified by earnings outlooks or a price-earnings ratio. You might be shocked when you recognize more than a few names on this list.