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Pinterest Raises $367M at $11B valuation

techcrunch.com

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Re: Pinterest Raises $367M at $11B valuation

#11

Post by sharkweek »

You know when you hear about a lot of insane valuations and your jaw sort of drops in disbelief?

I feel the opposite when I think about Pinterest. My immediate reaction here is "yeah, makes sense." I guess it must stem from my marketing agency days. I had SO MANY clients begging me to get them into Pinterest ads when they released. I also sit at home and see how much time my wife spends on the site and how dedicated she is to discovery through the app, especially as she makes many purchasing decisions after seeing things she likes pinned, from food to furniture.

Seems like a no-brainer that this one is going to end up crossing the IPO finish line at some point, and I would imagine they have bigger and better plans moving forward. I barely think they've scratched the surface of profitability.

Re: Pinterest Raises $367M at $11B valuation

#12

Post by lostsock »

> Since launching in 2009, Pinterest has raised $764M dollars; once this round closes (whether or not they raise the full $578M), they’ll have surpassed the billion dollar mark.

For the sake of this comment let's assume that Pinterest has never had any income at all... can someone please explain what they have spent, or plan on spending, over $1B on? If there isn't a plan to spend this money, what other motivations could they have for raising so much money and why are investors still pouring it in?

Re: Pinterest Raises $367M at $11B valuation

#15

Post by leroy_masochist »

birken wrote: post #5
amitutk wrote: post #3

Earlier quoted context omitted.

By taking $367m at $11b valuation, they have given away ~ 3.33% in this round. You may work backwards for previous rounds. For initial rounds with no public valuation info, you may assume 25% of the company was given away in each round.

Yeah, assuming all founders started out with 33%, they'd probably have 5-10% right now, probably closer to 5%. Best case scenario would be: 33% * (75% angel) * (75% series A) * (75% series B) * (85% series C) * (95%^4 Series D-G) = ~10% It could probably go down as far as 4 or 5% depending on how big option pools were and just how much dilution was in the earlier rounds.

> Best case scenario would be: 33% * (75% angel) * (75% series A) * (75% series B) * (85% series C) * (95%^4 Series D-G) = ~10%

Doesn't this assume that the earlier investors either didn't get pro rata rights (unlikely) or didn't choose to exercise them (conceivable for later rounds)?

Re: Pinterest Raises $367M at $11B valuation

#17

Post by taylorbuley »

sharkweek wrote: post #11

You know when you hear about a lot of insane valuations and your jaw sort of drops in disbelief? I feel the opposite when I think about Pinterest. My immediate reaction here is "yeah, makes sense." I guess it must stem from my marketing agency days. I had SO MANY clients begging me to get them into Pinterest ads when they released. I also sit at home and see how much time my wife spends on the site and how dedicated…

The pre-business model unicorn thing still confuses me. The kicker in your comment -- scratching the surface of profitability -- is what I find interesting. What if they start digging to find there's no depth behind this surface?

http://www.wsj.com/articles/viewers-dont-add-up-to-profit-fo...

Re: Pinterest Raises $367M at $11B valuation

#19

Post by sharkweek »

amitutk wrote: post #3
funkyy wrote: post #2

Anyway to see how much of the company is still in the hands of founders?

By taking $367m at $11b valuation, they have given away ~ 3.33% in this round. You may work backwards for previous rounds. For initial rounds with no public valuation info, you may assume 25% of the company was given away in each round.

Pulled valuation data for each round from the pitchbook.com platform:

http://i.imgur.com/OfBDZz0.png

Let me know if you want to see any specific cap tables, happy to pull those out.

Re: Pinterest Raises $367M at $11B valuation

#20

Post by birken »

teej wrote: post #7
birken wrote: post #5

Earlier quoted context omitted.

Yeah, assuming all founders started out with 33%, they'd probably have 5-10% right now, probably closer to 5%. Best case scenario would be: 33% * (75% angel) * (75% series A) * (75% series B) * (85% series C) * (95%^4 Series D-G) = ~10% It could probably go down as far as 4 or 5% depending on how big option pools were and just how much dilution was in the earlier rounds.

I think it's less then that. Pinterest's early days were rough, and I heard that their B or C round was on unfavorable terms just to keep the lights on before they blew up.

Well a worst case scenario might be something like:

33% * (66% seed funding) * (66% angel round) * (60% series A) * (60% series B) * (70% series C) * (85% series D) * (90%^2 series E/F) * (95% series G) ~= 2.4%

Still > 2% of an 11B company isn't bad.

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