When money has no meaning, the idea of “value” gets weird

This is a very good discussion about startup funding, and a reminder that the startup world has its own views on “value” and “valuation”.


“Early stage valuations aren’t really valuations. They are the exhaust fumes of a negotiation about two things — the amount raised and the amount of dilution.” — Fred Wilson; source.

“Those guys are morons,” says Palihapitiya of many value investors. The historic way of determining value by looking at balance sheets and discounted cash flow no longer works, he asserts. “Today, when money has no value, because we’ve essentially printed all the money in the world and we’ll continue to print it over and over, you have to find value in other parts of the balance sheet, so you have to go to things like brand or intangibles,” he says. “And this is where their mathematical models break, and then their brains explode.” — Chamath Palihapitiya; source.