And another company worth billions of dollars with revenue of no more than $12 million a year, again a big thank you to the fed, BUBBLE ben bernanke, yellen and the rest of the central banks out there today for making this happen, this wouldn't have happened without all those free bailouts, the TARP, the QE 1 the QE 2 and the QE 3, thanks to all the trillions being printed this was allowed to happen, also the zero % interest rates, the 200% increase in the markets that also allowed this company to have nearly a $3 billion dollar valuation, with out all that this company would be worth no more then a few million bucks.... Slack, the popular workplace communication and collaboration startup from Flickr co-founder Stewart Butterfield — is today confirming that it has raised its latest round of funding: a Series E of $160 million at a post-money valuation of $2.8 billion. This follows on from reports from us and others that it was raising funding at upwards of a $2 billion valuation — a massive premium on its $1.12 billion valuation in October 2014. http://techcrunch.com/2015/04/16/us...e-collaboration-startup-at-2-8b/#.od40ll:Mvcs
Why do you care given ET is worth 7.86 billion right now? But on a more serious note, I think the real challenge will be to monetize such ownership and that not too early. Valuations are just that but the only way people let you cash out is if something of real value has been built. I am sure there are exceptions that prove my lines of thinking naive but I would think this is the general case as entrepreneur and business owner myself. No bank or VC fund is gonna watch the owner drive away in the lambo while they remain holding a bag full of hot air.
Kevin O'Leary was on CNBC the other day and he suggested some of the tech companies with super high valuations should buy real estate and build up hard assets, then they have something to fall back on. Sounds like a good idea.
Ole' Saul Steinberg pulled off that trick in 1968 when he bought an insurance company, which ultimately failed.
Actually they often do. Give the founder 50mil in cash so he can buy a mansion and a lambo and he will continue to build the company for the longer term. Otherwise he may sellout too quickly to secure a lifestyle leaving potentially billions on the table.
Most of these investors jumping into these startups and valuing these companies in the hundreds of millions and billions are doing so because money is cheap right now, same thing happened with private equity back before the crisis and same thing is happening again today with these startups, there has never been a time in history when such fresh start ups have been valued like this.... if the free markets took care of the financial crisis back in 2008-2009 companies such as Slack would not be getting values in the billions, all this free cheap money once again is creating the drive to find nearly any investment and drive it higher, its happening in real estate, its happening in the high end car market, the art market, private equity, commercial real estate, in the IPO market, money is so cheap that over $1 Trillion worth of stock buybacks have occurred this year alone which is a record never seen before, thats how cheap money has become due to the 0% rates BUBBLE ben bernanke and friends have put in place for years now...the ceo of slack came out and said that now is the best time ever in history to raise money, even said that "We don’t have an immediate use for that money." (http://bits.blogs.nytimes.com/2015/...a-conversation-with-stewart-butterfield/?_r=0) from what I read the company is doing about $10-$12 million in revenue a year, thats peanuts when you have a valuation worth nearly $3 billion, could they do 2 or 3 more rounds of funding that could value the company at upwards of $7 or $10 or $15 billion by end of 2015 and 2016, sure they can, as long as the stock market stays hot and global markets keep breaking new highs and central banks keep pouring money into the slowing world economies than yea money will trickle its way down to this startup and other startups placing unbelievable values on them....from march 24th article this was quoted "Slack was introduced about a year ago by Mr. Butterfield and now serves about half a million workers every day, who use the app as a kind of replacement for email and instant messaging. The company offers a free version of its product and also charges companies a monthly fee of $6.50 or more for each user if they want additional features. Mr. Butterfield recently said Slack wasn’t profitable and that its losses totaled “a couple hundred thousand dollars a month.” So no profits at all and losses totaling around a quarter of a million.... most this company is worth in my opinion is no more than $25-$50 million. I give it a value of approx 1/10th of what they are truly valuing the company at...
You're not thinking this through all the way. If I told you I had a crystal ball and it said that Slack would become the market leader in its segment and would be earning a billion dollars per year in revenue within 5 years and that it would ultimately be acquired by Google in year 6 for $10 billion dollars, would you be willing to put up $10 million today for say, a 1% stake in the company (valuing it at $1Billion today) knowing that the exit is going to put $100 million back in your pocket? Of course you would. Early stage investors obtain an equity stake in a company because they think that stake will be worth more in the future. And here's the part you don't understand. It doesn't make any difference if the company makes any money or not, and here's why: If I told you I had a crystal ball and it said that Slack would become the market leader in its segment and would ultimately be acquired by Salesforce in year 6 for $10 billion dollars even though Slack itself isn't even profitable yet, would you be willing to put up $10 million today for say, a 1% stake in the company (valuing it at $1Billion today) knowing that the exit is going to put $100 million back in your pocket? Of course you would. But since nobody else today was privy to the knowledge of the crystal ball, they'll just think you're an idiot and blame your crazy company valuation on QE, bubble Ben, etc.