Elad's articles are always insightful. I had a similar discussion recently with a friend of mine, and here is what we came up with from our point of view: Lay

Elad's articles are always insightful. I had a similar discussion recently with a friend of mine, and here is what we came up with from our point of view: Layers of valuation - Level 1: Talent, Level 2: IP, Level 3: Product, Level 4: Market Validation, Level 5: Profits, Level 6: Branding Level 1 can be multiplied by connections to people with influence and deep pockets. Level 2 can be multiplied by a proven, protectable technology that speculatively can solve a very big product problem. Level 3 can be multiplied if it addresses a very large market. Level 4 can be multiplied based on traction - users / revenue. Level 5 can be multiplied based expected growth rate of profits. Level 6 can be multiplied based on the businesses presence in the industry, and/or with its customers. For me, its useful to look at the valuation as a function of risk mitigation based on asset class. For instance, where Elad points to 'Team Hire' and 'Team Buy', in both cases I think risk mitigation is largely a function of the talent reputation of the team in the eyes of the potential buyer. In this sense (reputation-based), any valuation of talent acquisition can be viewed as the net social capital of that team. However, this valuation basis become irrelevant with the presence of a solid product or intellectual property.