Only $200 million was raised this round for 5% of the company. All that means is that 5% of SnapChat is worth $200 million to a very small number of people. It

Only $200 million was raised this round for 5% of the company. All that means is that 5% of SnapChat is worth $200 million to a very small number of people. It does not mean that the other 95% is worth $3.8 billion, nor that the other 95% worth of value actually exists. Funding rounds are just deposits on houses. I can put down $40K for 5% of a house today, and choose to never pay the rest if someone gives me that option, implicitly valuing the house at $800K. But when the time comes to actually sell, it doesn't mean that I'll get $40K back. It just means that at the point of my deposit, the value of acquiring the option to acquiring the house was worth $40K. That's all. Valuations are bullshit.