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Not more than any other startup. Startup are valued based on future growth. I.e. most of the value is coming from long term projections (e.g. 10 years into the

Not more than any other startup. Startup are valued based on future growth. I.e. most of the value is coming from long term projections (e.g. 10 years into the future). So any startup, including wework , is basically selling a growth story. Now, its up to the investor to decide if the story is correct.

AndrewBissell 7y ago
Some startups are profitable from day one. Others have a feasible plan to reach profitability, even if they never quite make it there. Still others have no hope of ever becoming profitable, and their creators and backers know this, but hope to cash out by selling equity in their fundamentally worthless business at an inflated value through a promotion scheme. It's this variety that can accurately be termed frauds.
- perl4ever 7y ago
  As quoted in the article, Adam says they can choose to become profitable at any time. If that's so, then obviously they should do so before trying again at an IPO. If they instead try again in three months, then it would be logical to ask why they are in such a hurry to sell at a cut-rate price?
- streetcat1 7y ago
  So, I would not call softbank an uninformed investor. Also, its all a bet. (It would be a fraud if I present false statements to the investor, but as long as I show correct statement (even if I am not profitable), then it is up to the investor to decide) The fact that a startup is profitable does not affect its value. Look at Amazon. For a long time it has 0 profitability, and yet, it is one of the most valuable companies in the world. Remember that startup or any assets should be valued using cashflow from the future (DCF). As long as I can show that I will have positive cash flow even in 10-20 years from now, I can state a value.
deogeo 7y ago
> Not more than any other startup. That entire post is devoted to explaining that yes, much more than any other startup.

AndrewBissell 7y ago

Some startups are profitable from day one. Others have a feasible plan to reach profitability, even if they never quite make it there. Still others have no hope of ever becoming profitable, and their creators and backers know this, but hope to cash out by selling equity in their fundamentally worthless business at an inflated value through a promotion scheme. It's this variety that can accurately be termed frauds.

perl4ever 7y ago
As quoted in the article, Adam says they can choose to become profitable at any time. If that's so, then obviously they should do so before trying again at an IPO. If they instead try again in three months, then it would be logical to ask why they are in such a hurry to sell at a cut-rate price?
streetcat1 7y ago
So, I would not call softbank an uninformed investor. Also, its all a bet. (It would be a fraud if I present false statements to the investor, but as long as I show correct statement (even if I am not profitable), then it is up to the investor to decide) The fact that a startup is profitable does not affect its value. Look at Amazon. For a long time it has 0 profitability, and yet, it is one of the most valuable companies in the world. Remember that startup or any assets should be valued using cashflow from the future (DCF). As long as I can show that I will have positive cash flow even in 10-20 years from now, I can state a value.

deogeo 7y ago

> Not more than any other startup. That entire post is devoted to explaining that yes, much more than any other startup.