This is a good question to know the answer to: A substantial portion of the valuation of early stage startups is not their user/engagement/revenue numbers, it is the discounted value of the uncertainty of growth of those numbers until future checkpoints. This decays over time.https://twitter.com/rishmishra/status/1161045335969546241 …
-
Show this thread
-
One of the structural reasons for pivots is that pivots present an argument for refilling the uncertainty bucket which has been drained by thoroughly investigating the pre-pivot opportunity and finding it did not conceal a huge amount of value.
1 reply 10 retweets 116 likesShow this thread -
A thing which is obvious but probably confounding to people outside of the ecosystem: “Two kids with a gleam in their eye” (I.e. no indicia of progress) can produce a company with immediate implicit valuation far in excess of e.g. operating, profitable businesses that I sold.
1 reply 0 retweets 33 likesShow this thread -
This is because they’re selling uncertainty and I sold cash flows. I could sell uncertainty, too, and market prices for it are market prices but I’d speculate with high confidence that it is worth rather more than that of the notional “two kids.”
3 replies 1 retweet 38 likesShow this thread -
Price as of initial offer into ~same funding market at approximately same time.
Loading seems to be taking a while.
Twitter may be over capacity or experiencing a momentary hiccup. Try again or visit Twitter Status for more information.