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> I replied that our last round had been two years earlier, pre-launch, at a $50M valuation. Since then, we’d amassed 50M+ active users. > Steve said, “we’d pr

> I replied that our last round had been two years earlier, pre-launch, at a $50M valuation. Since then, we’d amassed 50M+ active users. > Steve said, “we’d probably acquire you for $50 million.” My heart sank. I couldn’t imagine telling our team that their years of work had created no new value. It was probably the valuation that was incorrect, or is invalidated by recent market changes. It could have been worth that much then, the value of the then-static product/users decreased, value was created since, but it's still only worth the same now. > “Did you say you ‘know’ you’re worth more? You have another offer?” Steve Jobs's gaze pierced holes through me. “Bullsh*. You’re lying to me. You’re full of sh*. We’re done here.” Steve had keen senses and didn't appreciate being lied to. Basically if you don't have another offer, how could you 'know' that?

hnarn 5y ago
It sounds like this guy just assumed that the initial valuation had to be correct, which is of course a childish way to look at the value of something. The value of anything, whether that's a multi-million dollar company or a Snickers bar, is decided by the market at the time it's placed in the market. If Apple is offering you $50M and everyone else is offering you less (or nothing), guess what, you're worth $50M. Maybe that's because you didn't sell yourself very well, but regardless your value is what other people are willing to pay.
- karmakaze 5y ago
  I agree. I can also see how it would be so easy to fall into this logical trap. Having your past value anchored in your mind at 50M for so long while you continue to show value and users added then adding up to 50M would be hard to reason about and emotionally accept on the spot. Still saying "Steve, I think [...] Actually, I know we’re worth three times as much." was clearly outside the lines, speaking to someone with much more experience valuing companies being acquired.

hnarn 5y ago

It sounds like this guy just assumed that the initial valuation had to be correct, which is of course a childish way to look at the value of something. The value of anything, whether that's a multi-million dollar company or a Snickers bar, is decided by the market at the time it's placed in the market. If Apple is offering you $50M and everyone else is offering you less (or nothing), guess what, you're worth $50M. Maybe that's because you didn't sell yourself very well, but regardless your value is what other people are willing to pay.

karmakaze 5y ago
I agree. I can also see how it would be so easy to fall into this logical trap. Having your past value anchored in your mind at 50M for so long while you continue to show value and users added then adding up to 50M would be hard to reason about and emotionally accept on the spot. Still saying "Steve, I think [...] Actually, I know we’re worth three times as much." was clearly outside the lines, speaking to someone with much more experience valuing companies being acquired.