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No, it really does have to do with accounting There are many VC backed companies that never state their valuation. There are many VC backed companies that do
by cloudjacker 10y ago
No, it really does have to do with accounting
There are many VC backed companies that never state their valuation.
There are many VC backed companies that do state their valuation after every funding round and buy up all the press releases [on techcrunch, exhibit a] so everybody knows. So their secretaries, banking partners, trophy wives, and sycophants fawn over them more.
All of those companies have completely different 409a valuations, which are MUCH lower, because you can't just say "well 10% was sold for this much, so therefore 100% is this much". Nobody ever posts those.
The FASB accounting standards are also much more intelligent.
These valuations are literally only for impressionable people that don't want an intelligent valuation.
- goseeastarwar 10y ago409A is lower because preferred shares have more rights over common shares. Employees want that number to be lower, to enjoy greater gains and lower exercise costs. In any case, as a company approaches an IPO event, the spread between common and preferred disappears. None of this is particularly controversial. Here's actual data for those curious: https://www.theinformation.com/comparing-common-stock-valuations-in-private-tech https://www.theinformation.com/comparing-common-stock-valuat...
- cloudjacker 10y agoNot controversial, just useless compared to other valuations methods that have utility