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Is this taking into account the terms of these ridiculous valuations? According to http://www.fenwick.com/publications/pages/the-terms-behind-the-unicorn-valuat
by haliax 10y ago
Is this taking into account the terms of these ridiculous valuations? According to http://www.fenwick.com/publications/pages/the-terms-behind-the-unicorn-valuations.aspx http://www.fenwick.com/publications/pages/the-terms-behind-t... these come with "significant downside protection" and other terms that make these deals more akin to debt than equity funding.
If you stop thinking about the valuation being the price of the company, and instead being the price of a financial product which includes shares AND these protection mechanisms (e.g. liquidity preferences) do these valuations still seem irrational?
- poof131 10y agoThere’s little downside protection from bankruptcy or from a fire sale to strategic investors who are waiting for bankruptcy. A friend recently left a startup that had raised over $100M where the whole executive team was celebrating an $800 revenue deal. He didn’t even wait to vest. Lots of mid to late stage startups are in big trouble, and it will take time to flush it out and see who’s all hype, who’s unit economics are upside down, and who are the real companies.