How Often Do Start-Ups Get a "Billion Dollar Valuation?"

With the impending Facebook initial public offering in the headlines, and an application merger and acquisition market that some would say it at least frothy, if not an actual "bubble," a bit of perspective probably is worth keeping.

Over the history of the institutional venture capital business (the past 40 years) the number of companies started every year that turn out to be worth billions sustainably is in the tens not the hundreds, according to venture capitalist Fred Wilson, of Union Square Ventures.

The phrase one sometimes hears is that many start-ups have "features," not potentially important "companies." Also the odds of great success when a firm is the fourth company in a space is arguably quite small.

It's hard to provide an order of magnitude better user experience or value in any market. It might be almost impossible in a new segment with multiple contestants. But soemthing like an order of magnitude "better" user experience is probably what wild success requires.