3 ms·

> But I definitely have major concerns that so much money is being paid for so little. Not enough people think about this. The ease with which multi-million do

> But I definitely have major concerns that so much money is being paid for so little. Not enough people think about this. The ease with which multi-million dollar valuations are obtained in the Valley is incredible. Heck, Y Combinator, which offers a six figure valuation to entrepreneurs, many of whom have no real-world experience and nothing more than an idea, is considered a "bad deal" by many. Outside of the Valley, the market is more like Shark Tank, where you'll struggle to get anywhere close to a million-dollar valuation without real traction (read: revenue and profit). Silicon Valley's easy money supports a lot of high-paying jobs. If entrepreneurs in the Valley didn't have the ability to raise six and seven figures of capital so easily, and without giving up 100% of their businesses, there would be a lot fewer developers with a year or two of Ruby on Rails experience making $120,000/year.

judk 12y ago
6 figure valuation is in no way inflated. When you get a job offer with a 4 year stock vest in Microsoft, that's a 6 figure valuation on your contribution to Microsoft.
- 7Figures2Commas 12y ago
  So seed stage valuations should be based on the salary a founder could earn working at a large company over the course of half a decade? Show me an investor who invests on that basis and I'll show you somebody who is likely to lose his or her money. Starting and growing a business is hard. If it was easy, everybody would do it. There are tons of people who are capable of thriving and creating value as an employee of a large company but who can't run a business. That's not a knock on them, it's just reality. We're spoiled in the Valley, especially during boom times, and it's helpful to spend some time outside of the Valley. Like I said, Shark Tank is a lot closer to reality for most people in most places. Six and seven figure valuations aren't handed out like candy on Halloween. They are earned through meaningful traction.

judk 12y ago

6 figure valuation is in no way inflated. When you get a job offer with a 4 year stock vest in Microsoft, that's a 6 figure valuation on your contribution to Microsoft.

7Figures2Commas 12y ago
So seed stage valuations should be based on the salary a founder could earn working at a large company over the course of half a decade? Show me an investor who invests on that basis and I'll show you somebody who is likely to lose his or her money. Starting and growing a business is hard. If it was easy, everybody would do it. There are tons of people who are capable of thriving and creating value as an employee of a large company but who can't run a business. That's not a knock on them, it's just reality. We're spoiled in the Valley, especially during boom times, and it's helpful to spend some time outside of the Valley. Like I said, Shark Tank is a lot closer to reality for most people in most places. Six and seven figure valuations aren't handed out like candy on Halloween. They are earned through meaningful traction.