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That's correct. When a company's assets are worth more than the company as a business, it is appropriate to reallocate those assets to something more productive
by skookumchuck 8y ago
That's correct. When a company's assets are worth more than the company as a business, it is appropriate to reallocate those assets to something more productive.
- sytelus 8y agoNo, it's not. Virtually every startup has assets (i.e. employees) worth more than company business (i.e. zero revenue). It is super important to distinguish between dieng company vs sick company vs growing company. If there was someone who killed every human for their teeth and bones when they fail to be productive because of sickness , you won't consider that as wise business choice.
- skookumchuck 8y agoThe investors certainly believe the company is worth more than the money they are investing, or they wouldn't invest. (Revenue isn't how a business is valued anyway, even in a mature business.) A startup's value is based on future anticipated ROI. My point stands.
- calpaterson 8y agoYes, the GP is right and I think you are talking at cross purposes. In finance, employees are not considered assets and companies with no revenue are not necessarily considered to have no value.