4 ms·
4x valuation or do i remember less from accounting than i thought? Their annual revenue is estimated to be around $5 million, with $2 million in profit. Doesn
by cellis 19y ago
4x valuation or do i remember less from accounting than i thought?
Their annual revenue is estimated to be around $5 million, with $2 million in profit.
Doesn't make sense to me.
- aston 19y ago4x valuation would be small, i.e. not expecting too much growth.
- run4yourlives 19y agoIt's not small, it's realistic. All the other valuations are retarded, that's all.
- rms 19y agoI think it's worth less because the founders aren't vesting in the new company or anything; they're quitting.
- carpal 19y ago3x revenue is pretty standard for businesses that aren't really growing anymore. Seems like a pretty solid deal to me.
- nostrademons 19y agoBusinesses that aren't growing anymore usually get valued based on earnings. The P/E of the S&P 500 is about 20 (perhaps a little less after the recent market turbulence), which means that HotOrNot's price would be about half the average publicly-traded corporation, including all the old-line manufacturing businesses and companies in decline.
- carpal 19y agoP/E ignores a lot of things, too. Old-line manufacturing businesses usually have a ton of assets (machinery, land, etc) that boost their valuations. I doubt HotOrNot has much more than the brand name and domain, as far as assets are concerned.
- utnick 19y agoYea i don't see the point of selling for 20 mill when you are generating that much revenue. It shouldn't take that much of their time to run that thing, I would just let it ride.
- jkush 19y agoI don't see hot or not still pulling in 5M anually four years from now. Hot or Not seems like it's probably going to have a shelf life. While I think you do have an argument, taking the money is probably the best option.
- greendestiny 19y agoNot only that, but the founders tried to turn it into something huge and failed.
- jmelesky 19y agoIt's been going for over seven years so far, without much in the way of marketing. I don't see why it couldn't last four more years with a little more attention.
- brett 19y agoLast year they converted to a C Corp so they can't really pay themselves through the same way anymore. http://james.hotornot.com/2007/02/on-having-balls-part-ii-staying-hungry.html http://james.hotornot.com/2007/02/on-having-balls-part-ii-st...
- run4yourlives 19y agoThat's a completely normal offer in the world of regular business, in fact, it's pretty good considering some of the particulars. When non-outlandish deals and realistic valuations stop making sense to you, it's a clear sign that it's time to explore life outside the valley a bit!