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What are VCs shooting for here? Even a 10x exit at 6B valuation seems outrageous for a service that doesn't seem that easy to scale.
by josu 12y ago
What are VCs shooting for here? Even a 10x exit at 6B valuation seems outrageous for a service that doesn't seem that easy to scale.
- deleted 12y ago[deleted]
- prostoalex 12y agoThis is late-stage capital, not VC. Goldman Sachs invested in Facebook at $50 bil valuation, so with later revelation that IPO would happen around $100 bil price point, presumably they were happy about 2x.
- adevine 12y agoBut when FB had a $50 bil valuation, they already had hundreds of millions of users and real revenue. This company has neither. Bad things are bound to happen when capital is coming in at "late stage" pricing to a VC-stage company.
- prostoalex 12y agoIf I had to guess (and this is based on nothing but conjecture), an amount like that for an early stage e-commerce play is to be used for some sort of capital expansion. Perhaps somebody is going to buy up RadioShack stores or Sears leases. Harry's Shaving Products is another one that comes to mind raising this much money early-stage, and they've pumped all nine digits of their round into a German steelmaker. From the large investor perspective this provides some sort of fallback scenario, as worst-case scenario you're left with some commercial real-estate portfolio.
- arfliw 12y agopre-launch late-stage capital #ShitVCsSaidIn1999