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Once a startup has revenues, its valuation may be tied to a multiple of revenues. Without revenues, a popular startup such as Twitter may be in a stronger posit
by byoung2 17y ago
Once a startup has revenues, its valuation may be tied to a multiple of revenues. Without revenues, a popular startup such as Twitter may be in a stronger position to name its price.
Why does that seem so backwards to me?
- whatusername 17y agoit makes a perverse sense. It almost becomes a bluffing game - obviously Twitter can generate some revenues. Deals are done on the basis of future revenue. If current revenue is unknown - then everything is just based on projections.. "It is better to stay silent and be thought a fool rather than speak and remove all doubt" Once you're generating revenue - a buyer has to show how they could do it better. (Or buy you at Nx revenue - a loss for you)