4 ms·
I never understood these ~13.3x valuations. If I invest $5 in a lemonade stand, what makes it valued at $66.50?
by shshhdhs 8y ago
I never understood these ~13.3x valuations. If I invest $5 in a lemonade stand, what makes it valued at $66.50?
- burtonator 8y agoPotential future revenues and value...
- nahtnam 8y agoDoesn't this just mean that Discord received 150 million in return for 7.5% stake at the company?
- munchbunny 8y agoMore or less, with the very big caveat that the specific terms of the deal means it's almost never actually a straight exchange of money for share of equity.
- shampto3 8y agoIt's based on the equity the investor is purchasing in the investment. Here's an easy math example: I invest $10 in a lemonade stand and get 10% equity in the company. That means that I can theoretically buy the company at $100 to get 100% of the equity. So when investors put $150M into a company, they are purchasing equity/stock/shares/whatever and the company can then be valued based on the percentage of equity they get for their investment.
- deleted 8y ago[deleted]
- deleted 8y ago[deleted]
- Clever321 8y agoI would venture it's the huge amount of monthly active users. 200M users at just $1 a year (or month) is a lot of money compared to the $150M they just picked up in debt.