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I'm pretty bearish on Uber, but let's note that it's a down-round of $50B or so. Softbank clearly still thinks that there's a bright future ahead for Uber, if

I'm pretty bearish on Uber, but let's note that it's a down-round of $50B or so. Softbank clearly still thinks that there's a bright future ahead for Uber, if not quite as bright as the earlier $70B valuation suggested. I'm more bearish than Softbank is. But there's a serious difference between a down-round that's still makes Uber a uniquely valuable unicorn and the kind of down rounds that a more typical start-up might get.

Analemma_ 9y ago
> But there's a serious difference between a down-round that's still makes Uber a uniquely valuable unicorn and the kind of down rounds that a more typical start-up might get. The best thing you can say about this is that "it could be worse", but down rounds are ugly no matter the amount. Because: - it indicates a downward trajectory. Start-ups in growth typically IPO at a higher valuation than their most recent round, because they're moving up. But the reverse is also true, so if present trends continue the IPO valuation may be even less. Sure, Softbank may have factored that in, but more ugly news has surfaced since then, like the destruction of evidence. - Down rounds scare away talent, both new hires (who will be much more reluctant to accept equity) and existing employees (who are going to get fucked over when existing investors demand more equity as compensation for the lower value)
- aetherson 9y ago
  I mean, a down round doesn't indicate a downward trajectory in the minds of the investors. They're still investing. SoftBank expects Uber to be worth more than $50B. In their minds, it's a correction, not a slippery slope. Down round are really bad for existing employees, unless more equity is given to make them whole. But that's not the perspective that matters here.
crdoconnor 9y ago
>Softbank clearly still thinks that there's a bright future ahead for Uber That's not an encouraging sign. Large institutional Japanese investors have often been suckers.

Analemma_ 9y ago

> But there's a serious difference between a down-round that's still makes Uber a uniquely valuable unicorn and the kind of down rounds that a more typical start-up might get. The best thing you can say about this is that "it could be worse", but down rounds are ugly no matter the amount. Because: - it indicates a downward trajectory. Start-ups in growth typically IPO at a higher valuation than their most recent round, because they're moving up. But the reverse is also true, so if present trends continue the IPO valuation may be even less. Sure, Softbank may have factored that in, but more ugly news has surfaced since then, like the destruction of evidence. - Down rounds scare away talent, both new hires (who will be much more reluctant to accept equity) and existing employees (who are going to get fucked over when existing investors demand more equity as compensation for the lower value)

aetherson 9y ago
I mean, a down round doesn't indicate a downward trajectory in the minds of the investors. They're still investing. SoftBank expects Uber to be worth more than $50B. In their minds, it's a correction, not a slippery slope. Down round are really bad for existing employees, unless more equity is given to make them whole. But that's not the perspective that matters here.

crdoconnor 9y ago

>Softbank clearly still thinks that there's a bright future ahead for Uber That's not an encouraging sign. Large institutional Japanese investors have often been suckers.