So long as Google, Apple, Facebook and Microsoft are there to acquihire failed startups and return money to VC and seed stage investors, everything's peachy. T

So long as Google, Apple, Facebook and Microsoft are there to acquihire failed startups and return money to VC and seed stage investors, everything's peachy. The whole "valuation" thing is dumb anyway... saying that if you buy 5% of a company for $5, the company is worth $100 is incorrect because value is defined by how much you can SELL a thing for, not how much you paid for it. Given the fact that, if you buy 5% of some company in a seed stage round, you can probably not sell it at all, your share of the company is valueless, so the value of the company is whatever the owners can sell the remaining 95% of the company for. Every time you sell more of the company, it reduces the value of the company unless the remaining percentage is increasing in value quickly enough to offset what you've already sold. It's not that valuations are too high, it's that we're calculating the value of a company inaccurately.