It seems Sarah wasn't kidding about working right up until she gives�birth. In this week's positively-last-before-the-birth episode of Why Is�This News?, Sarah and�Paul�are prompted by the ongoing reports of�Dropbox's mega funding to talk about valuations. The typical outrage is over whether a company like Dropbox is "worth" $4 billion, but as we argue, that's misses the point. Venture backed valuations are always a function of a company's promise and how much demand there is to invest, not what a company is worth right now. But there are reasons to worry about companies getting into valuation traps as the price tags get significantly over the $1 billion level.
Wednesday, August 31, 2011
WITN: The New Wrinkle on the Valuation Trap (TCTV)
It seems Sarah wasn't kidding about working right up until she gives�birth. In this week's positively-last-before-the-birth episode of Why Is�This News?, Sarah and�Paul�are prompted by the ongoing reports of�Dropbox's mega funding to talk about valuations. The typical outrage is over whether a company like Dropbox is "worth" $4 billion, but as we argue, that's misses the point. Venture backed valuations are always a function of a company's promise and how much demand there is to invest, not what a company is worth right now. But there are reasons to worry about companies getting into valuation traps as the price tags get significantly over the $1 billion level.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment