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The Valuation Game

Jacob Silverman writes about the new found love of venture capitalists: Media. I don’t agree with many of the points and assertions in this one but it certainly makes for a good read with some interesting insights. For instance, on Startup valuation:

Before sending out a term sheet to potential investors, Blumberg has to decide how much his company is worth. The number his team comes up with is $10 million—an essentially arbitrary figure, as he’s quick to admit. “The valuation, like everything in this startup world, is a story you’re telling,” Blumberg says. It’s a promise of future growth. The value isn’t, in any familiar sense, real. But all this is typical for a startup, especially in the midst of the present tech bubble.

I remember speaking to a friend about this recently and recalled his emphasis on ‘vision’, because valuation isn’t about the numbers but about the vision he said.



This post first appeared on Abhijeet's, please read the originial post: here

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The Valuation Game

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