Squaring Venture Capital Valuations with Reality
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Squaring Venture Capital Valuations with Reality
1–10 of 48 posts
Re: Squaring Venture Capital Valuations with Reality
#2I'm actually surprised that it's as low as 50% of unicorns playing these valuation games.
Re: Squaring Venture Capital Valuations with Reality
#3I wouldn't even call these complex mechanics - TFA basically says more favorable terms in later rounds (liquidations preferences, etc) mean that the high share price in those rounds shouldn't be used as the price for all outstanding shares. This is a great point that I hadn't really thought about before, but I would also expect people smarter than me to bake into their valuations.
Re: Squaring Venture Capital Valuations with Reality
#4And the other other half are undervalued then.
Re: Squaring Venture Capital Valuations with Reality
#5Related: Stewart Butterfield on his Unicorn status: "It's arbitrary as f*ck. There's no logic to what you get valued at" => https://pando.com/2015/02/10/stewart-butterfield-on-his-unic...
Re: Squaring Venture Capital Valuations with Reality
#6And the other other half are undervalued then.
It's not a zero sum game. Company valuations are independent.
Re: Squaring Venture Capital Valuations with Reality
#7And the other other half are undervalued then.
The other half could be overvalued for other reasons.
Re: Squaring Venture Capital Valuations with Reality
#8I would worry less about their value and figure out if they can make money or if after the IPO people believe it.
Re: Squaring Venture Capital Valuations with Reality
#9And the other other half are undervalued then.
Nope, because none of them are calculating valuations using their lowest priced shares are they?