3 ms·
The idea that valuations can be affected by staff numbers is one I have heard numerous times. While I wouldn't refer to employees as assets, it seems like a mi
by apalmblad 16y ago
The idea that valuations can be affected by staff numbers is one I have heard numerous times. While I wouldn't refer to employees as assets, it seems like a mistake to completely discount the idea that increasing the number of engineers won't affect valuation.
The best I can come up with at the moment are some comments in the wake of Powerset's acquisition:
"At that time we knew that a talented engineer in a tough to get tech was worth about $1.5 million per head. Thus, I knew with relative assurance that since we were going to hire at least 70 people with our Series A money, that our worst case scenario was about a $100 million exit." -[http://blognewcomb.squarespace.com/essays/2010/10/14/cult-creation.html http://blognewcomb.squarespace.com/essays/2010/10/14/cult-cr...]
- tptacek 16y agoIn many cases the team is a crucial component of a valuation. That is not the same thing as saying "if the business fails and you built a good team, your worst case scenario can be a talent acquisition". A talent acquisition is on the "good" end of the spectrum of scenarios, is unlikely, and appears to happen only when there's a graceful mesh between what an acquirer wants to do with a specific team and what that team has already been doing.