5 ms·

Ning Raises $15 Million More at a - Yes, Really - $750 Million Valuation

19 points by jkopelman 17y ago

deleted 17y ago
[deleted]
redorb 17y ago
750mm sounds crazy until you read that they have raised 119mm so far... thats only a 5.5x ROI if sold at that valuation. *Ning has 29.5mm registered users, but is adding 1mm every 15 days, to me this says fluff ...
- neilc 17y ago
  750mm sounds crazy until you read that they have raised 119mm so far... thats only a 5.5x ROI if sold at that valuation. Perhaps, but that doesn't make $750 million any less crazy.
  - rjurney 17y ago
    It sort of does - if the money came from existing investors in a follow-on round. If they're just trying to keep it from being a down round for appearances sake - as in Ning would run out of money otherwise - they might be contributing in amounts equal to the existing cap table, so whatever the valuation they're only cramming themselves down, and it doesn't matter how much. I don't know what happened, but this makes sense. Most every investor is shoveling money into their existing deals right now to keep them afloat. I could issue a million shares, then sell you one for $750, and wallah, I'm valued at $750m. Neat trick eh? Someone slap me if my stock math is broken.
    - evgen 17y ago
      Remember that they are not just cramming themselves down, all of the common shareholders (like the employees) are getting a haircut.
    - neilc 17y ago
      It sort of does - if the money came from existing investors in a follow-on round. It didn't: "The money for this fifth Series E round comes from a Silicon Valley venture firm, Lightspeed Venture Partners ... [there was] interest by Ning in adding a top VC to its investor pool."
      - rjurney 17y ago
        +1 for superior reading comprehension.
- kitcar 17y ago
  Also new users is very different from active users - I don't remember how many ning networks I have signed up to, but I have never returned to any of the more than once...
- seldo 17y ago
  That makes it sound more crazy, not less crazy. It suggests the reason they pushed for such a high valuation is so that existing investors wouldn't get hosed, rather than the true perceived value of the business.
- webwright 17y ago
  A 5.5x ROI? For who? That's not how valuations work. If it has a current valuation of 750m on paper and sells for 750m, then the folks who participated in the most recent round don't make a dime (other than liquidation prefs). The valuation is the total value of outstanding shares (investors, founders, previous round investors, employees, options pool, advisors, board folks, etc). There are presumably some liquidation prefs for investors, so a 750m exit would result in a minuscule return for the recent investors and likely virtually nothing for folks with options. Of course it all comes down to terms. Effectively, Ning just said to their recent investors with a straight face: "We think we can sell Ning in 3-5ish years for 4 BILLIONish." ... Which likely means IPO.

19 points by jkopelman 17y ago

deleted 17y ago

[deleted]

750mm sounds crazy until you read that they have raised 119mm so far... thats only a 5.5x ROI if sold at that valuation. *Ning has 29.5mm registered users, but is adding 1mm every 15 days, to me this says fluff ...

neilc 17y ago
750mm sounds crazy until you read that they have raised 119mm so far... thats only a 5.5x ROI if sold at that valuation. Perhaps, but that doesn't make $750 million any less crazy.
- rjurney 17y ago
  It sort of does - if the money came from existing investors in a follow-on round. If they're just trying to keep it from being a down round for appearances sake - as in Ning would run out of money otherwise - they might be contributing in amounts equal to the existing cap table, so whatever the valuation they're only cramming themselves down, and it doesn't matter how much. I don't know what happened, but this makes sense. Most every investor is shoveling money into their existing deals right now to keep them afloat. I could issue a million shares, then sell you one for $750, and wallah, I'm valued at $750m. Neat trick eh? Someone slap me if my stock math is broken.
  - evgen 17y ago
    Remember that they are not just cramming themselves down, all of the common shareholders (like the employees) are getting a haircut.
  - neilc 17y ago
    It sort of does - if the money came from existing investors in a follow-on round. It didn't: "The money for this fifth Series E round comes from a Silicon Valley venture firm, Lightspeed Venture Partners ... [there was] interest by Ning in adding a top VC to its investor pool."
    - rjurney 17y ago
      +1 for superior reading comprehension.
kitcar 17y ago
Also new users is very different from active users - I don't remember how many ning networks I have signed up to, but I have never returned to any of the more than once...
seldo 17y ago
That makes it sound more crazy, not less crazy. It suggests the reason they pushed for such a high valuation is so that existing investors wouldn't get hosed, rather than the true perceived value of the business.
webwright 17y ago
A 5.5x ROI? For who? That's not how valuations work. If it has a current valuation of 750m on paper and sells for 750m, then the folks who participated in the most recent round don't make a dime (other than liquidation prefs). The valuation is the total value of outstanding shares (investors, founders, previous round investors, employees, options pool, advisors, board folks, etc). There are presumably some liquidation prefs for investors, so a 750m exit would result in a minuscule return for the recent investors and likely virtually nothing for folks with options. Of course it all comes down to terms. Effectively, Ning just said to their recent investors with a straight face: "We think we can sell Ning in 3-5ish years for 4 BILLIONish." ... Which likely means IPO.