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It's more important to focus on whether a company will be successful than its valuation. Nowhere did I say valuation did not have an impact. Focusing on valuati
by sskates 14y ago
It's more important to focus on whether a company will be successful than its valuation. Nowhere did I say valuation did not have an impact. Focusing on valuation and ignoring whether a company will be successful is a mistake.
I, and any other investor, would have gladly bought Google stock at any valuation before its IPO, whether at $5MM, $15MM or $100MM. Whereas it doesn't matter how great your terms are if the startup you invest in fails.
- aneth4 14y agoWhat kind of investor focuses on valuation and ignores whether a company will be successful? You said "there are a segment of investors who use valuation to drive their decisions, even if its irrational to do so". It is not irrational to use valuation to drive decisions, though it is obviously stupid to have that be the only factor. It is however, a major one. Of course if success is highly probably, one should not be deterred by valuation, and in fact valuation should be higher. These days, many companies are not risk discounted enough, making many investments a bad deal for investors. Companies raise at $10M valuations and go out of business 6 months later. This is not healthy.