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I find it interesting that articles always point to AirBnB and DropBox but rarely mention Heroku... YC's largest exit to-date.
by ubi 15y ago
I find it interesting that articles always point to AirBnB and DropBox but rarely mention Heroku... YC's largest exit to-date.
- deleted 15y ago[deleted]
- mark_up 15y agoHeroku is a B2B startup, unlike AirBnB and Dropbox. B2C startups will always be more sexy and interesting to the wider Techcrunch audience.
- rdl 15y agoThe valuations of both AirBnB and Dropbox are >5x that of the exit value of Heroku, and are still in play. It's entirely possible either (or both) could be $10b companies (yes, this seems crazy to me at some level too, but it's consistent with economic reality as it currently exists). If AirBnB totally disrupts the hotel industry, it could be bigger still. If Dropbox totally takes over as how documents are stored, edited, and managed, of course it would be bigger.
- robryan 15y agoThese valuations can go just as fast as they come though. I know for me, and a lot of people, the concrete value that was determined because someone actually paid it holds a higher weight than the valuations speculative investors have given the lastest hot startups.
- rdl 15y agoThere is some value to that, certainly. Pro: I think selling the whole company for $x is harder than selling 10% for $x/10. Con: Big companies can also destroy value effectively (doesn't appear to be the case at all with Salesforce/Heroku, but...look at anything Yahoo has bought, and a bunch of things Google, Microsoft, etc. have bought. Skype, etc. There's also some bias in the press here -- people reading mass-market publications actually might use (or at least understand) dropbox and airbnb; they have no idea what Heroku does. And, in tech/venture press, independent companies are more interesting because they might get bought; it's unlikely anyone will buy Heroku from Salesforce, or buy Salesforce, so it's less interesting to the press.
- robryan 15y agoThe value destruction is a good point, it just depends on where we are looking. Whether people consider a good sale price that was driven into the ground as more of a success than a lower sale price which goes on to continue to thrive and be a good investment for the acquirer.
- wtvanhest 15y agoI disagree entirely. A professional investor at the early stage is no less a valuation expert than an investor after IPO. This holds true even more so for companies who acquire to integrate or to acquire talent.
- robryan 15y agoI think it is about the cashout event, if a YC company went to IPO, we could talk about what kind of value YC/ others cashed out at. The company paying to hire talent is also cashing YC/ others out. It doesn't matter how badly they over/ undervalue it they have paid that amount.
- wtvanhest 15y agoMy disagreement came from how to think about valuations and investing: I know for me, and a lot of people, the concrete value that was determined because someone actually paid it holds a higher weight than the valuations speculative investors have given the lastest hot startups. When an early stage professional investor, invests in a startup at a particular valuation, they are just as qualified as someone in a later round. Yes, for the entrepreneur they do not have an "exit", but you do not know the other terms of the deal. In many cases entrepreneurs cash out at many rounds so a big valuation in an early round can in fact make them wealthy. The line of thinking that professional investors at early stages are "speculative" is true, but not as much once you consider they are making more than 1 investment. -I work at a post IPO investment fund, but I respect those that make tough decisions earlier in the lifecycle of a business and respect entrepreneurs that get that far.