How can it not exist? How could it be spoken of if it did not?
The idea that the imaginary is not real is a common misconception that creates a lot of confusion. Consider this:
Given a mirror, and an image in the mirror, both exist. The image is 'substantial' enough to take a photograph of it. The photograph, and the image it contains, also exist. Notice that getting an image in the mirror requires that the object imaged is required to be in front of that mirror at the same time that the image is formed. There are also other requirements, such as lighting, that are not immediately relevant here. Notice too that getting a photograph of either the object, or its image, has similar requirements, and that the photograph alone may not be sufficient to determine whether the photographic image is of the object or of an image of that object; i.e., the object and the image can be 'confused'.
Now consider a 'sophisticated' mirror that has the capability of retaining or storing images of all that comes before it; e.g., a 'computerized' mirror. Such a mirror could then present an image of an object, or of objects, that are not immediately before it; i.e., from 'memory'. It could also produce a composite image of objects before it and images of objects from storage, superimposing them, or manipulating them in various ways. Thus an image of an object that never came before it, like a unicorn, could be produced. Notice, however, that each part of such a composite image was created from 'real' objects that did come before it at some time. Though the image itself may be manipulated, or distorted, it exists, i.e., it is 'real', and each part of that image represents, or refers to, 'real' objects, or parts thereof, that came before the mirror and which also exist, or did exist at some time.
Minds create concepts, or 'images', in a similar fashion. Those concepts are as real as the images in a mirror as well as the 'outside' objects, or environment, that came to the mind's attention as experiences. The reality of the concepts is distinguished from the reality they represent by considering one to be 'virtual', and the other to be 'actual'. Both exist. Both are real. Every element of every concept refers to some element of 'actual' reality, no matter how manipulated, or distorted, the composite 'virtual' representation may be.