Pinterest Raises $367M at $11B valuation • Hacker News Board

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

#71

Post by leroy_masochist » Mon, Mar 16, 2015, 11:49 PM UTC

birken wrote: post #26

leroy_masochist wrote: post #15

Earlier quoted context omitted.

> 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)?

When funding is announced the amount put in via pro rata rights would be included in whatever the total that is announced. If a startup said they raised $10 million led by XYZ VC, that means that XYZ VC probably put in $5-7.5 million, and the rest would be filled with other investors and previous investors.

Makes sense -- thank you.

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

#72

Post by mwcremer » Mon, Mar 16, 2015, 11:50 PM UTC

lostsock wrote: post #29

jamiequint wrote: post #22

Earlier quoted context omitted.

500+ employees.

500 employees * lets say $150,000 per employee * 6 years is only $450,000,000. That leaves ~$150m from previous rounds to spend on infrastructure etc before they need to raise more in the latest round.

Conventional wisdom is that an employee costs the company twice their salary (insurance, facilities, etc.) So it's closer to $1 billion.

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

#73

Post by monsterix » Mon, Mar 16, 2015, 11:51 PM UTC

callmeed wrote: post #53

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…

Agreed 100%. There's so much purchasing intent on Pinterest. I think it could be a stronger platform than Facebook for advertising non-digital goods. Every bride uses Pinterest (and now most wedding vendors and bloggers). My mother-in-law uses it every day to plan all her home remodeling projects and she's 60-something.

> Every bride uses Pinterest (and now most wedding vendors and bloggers).

Any study covering all the brides situation to qualify that comment? I attended three weddings recently. Not one was on Pinterest, all were on email rather.

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

#74

Post by jsmthrowaway » Mon, Mar 16, 2015, 11:51 PM UTC

bottled_poe wrote: post #70

jsmthrowaway wrote: post #48

Earlier quoted context omitted.

I get the feeling no matter what comparison I make, you'd call it misleading, because that's really splitting at hairs. The thrust of the comment and the point of referencing Armenia's GDP was the scale of the figures. I've now edited it out since apparently nobody can address my point without slapping around the GDP comparison, as if it's important I get every word of my comment exactly right regardless of the point…

Welcome to the free market. Either deliver what people want or fail. If influencing human behaviour is more important to you, then you may be in the wrong profession.

I see it's now time to condescendingly explain economics to me to counter a morality lamentation, including the suggestion that I should shut up and get out of not just the industry, but my profession, as if somehow I fucked up thinking computers can effect change outside of marketing.

Right, how dare I invest my life into writing software and hoping the possibilities include anything outside of selling Pepsi and Versace. My bad. What do you suggest as my new profession, bottled_poe?

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

#75

Post by redorb » Mon, Mar 16, 2015, 11:51 PM UTC

lisa_henderson wrote: post #67

ptio wrote: post #49

Earlier quoted context omitted.

For founders, employees, and investors that will make significant financial gains from the IPO.

You should run away from any company where "founders, employees, and investors" regard an IPO as the finish line. Run away as fast as you can.

They'd never say it was.. At minimum it's a milestone.

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

#76

Post by [deleted] » Mon, Mar 16, 2015, 11:54 PM UTC

jsmthrowaway wrote: post #48

jaronheard wrote: post #40

Earlier quoted context omitted.

Misleading comparison. Armenia's GDP is the estimated economic worth produced annually by Armenia. Pinterest's valuation relates to the economic value produced by Pinterest for all future years, not annually.

I get the feeling no matter what comparison I make, you'd call it misleading, because that's really splitting at hairs. The thrust of the comment and the point of referencing Armenia's GDP was the scale of the figures. I've now edited it out since apparently nobody can address my point without slapping around the GDP comparison, as if it's important I get every word of my comment exactly right regardless of the point…

[deleted]

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

#77

Post by nl » Mon, Mar 16, 2015, 11:55 PM UTC

tdees40 wrote: post #56

nl wrote: post #33

Earlier quoted context omitted.

I'm not sure what your point is? 1) Youtube isn't profitable, but it's taking more and more "hours watched" out of the TV market. Google can keep it running at break even for as long as they want, and then adjust the ad prices up very, very slightly and start making profit based on the huge audience. 2) Video watching (usually) has very little commercial intent, especially in terms of some kind of "commercial value p…

If YouTube can increase ad prices without losing advertisers, why aren't they doing that now?

They don't need to.

They'd rather increase the top line (revenue) by growing the market. That means keeping it as cheap as possible for advertisers to use, while still covering their costs.

The idea is to get media buyers used to a given rate per video view, then use increases in YouTube usage to increase the total amount of money they bring in (revenue), and use economies of scale and technology change to drive costs down.

The long game for them is to build the perfect video advertising platform on YouTube, and then allow other video platforms to use it (in the same way a huge number of websites use AdSense/DoubleClick).

There's a lot of money in TV advertising. Google wants that money, and they can afford to wait another 10 years for the market to develop enough for it to happen.

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

#78

Post by adventured » Mon, Mar 16, 2015, 11:55 PM UTC

logicallee wrote: post #61

adventured wrote: post #25

Earlier quoted context omitted.

If the stock market melts down - which it's prone to do once or twice per decade - the ability for Pinterest to IPO and take advantage of favorable market conditions will close, perhaps for years. Simply put, raising money in this environment is extraordinarily favorable, a company may only get this window once every seven to ten years. The Fed has yet to raise interest rates, but may choose to this year. The end of…

this is a good point. if they didn't raise money now, they might have to resort to revenue.

I saw this type of statement a lot by Facebook doubters (it could never make money, it would never have real sales, it had no business model, etc).

Let me check Facebook's last fiscal year.

$12.4 billion sales; $2.9 billion profit

Could Pinterest reach $5 billion in sales and $1 billion in net income based on what they're capable of in the next five or six years when it comes to traffic and the obvious monetization? Yes, and it would make the present valuation dirt cheap.

Twitter just turned on their revenue machine two years ago, and they're already at $500m a quarter. They too supposedly had questionable business potential.

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

#79

Post by gtremper » Mon, Mar 16, 2015, 11:57 PM UTC

bobbles wrote: post #51

I love pinterest because the type of people on Hacker News are obviously not the target audience and so can't understand it. Someone gets engaged. Almost every day between that day and their wedding will be on pinterest to get great ideas on every single item / food / clothing involved. It's like amazon referrals on steroids

I was really confused about the point you were making until I realized you didn't mean user engagement.....

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

#80

Post by DanBC » Mon, Mar 16, 2015, 11:58 PM UTC

monsterix wrote: post #73

callmeed wrote: post #53

Earlier quoted context omitted.

Agreed 100%. There's so much purchasing intent on Pinterest. I think it could be a stronger platform than Facebook for advertising non-digital goods. Every bride uses Pinterest (and now most wedding vendors and bloggers). My mother-in-law uses it every day to plan all her home remodeling projects and she's 60-something.

> Every bride uses Pinterest (and now most wedding vendors and bloggers). Any study covering all the brides situation to qualify that comment? I attended three weddings recently. Not one was on Pinterest, all were on email rather.

You attended the weddings as a guest? Brides and grooms and wedding planners and venues make extensive use of Pinterest. Pinterest is brilliant for that kind of thing. You probably don't see that as a guest.