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Comment by minimaxir | Hacker News Reader

I'm disappointed to see this from Sam.

After Twilio filed for IPO, someone wrote a "here's what Hacker News said about Twilio," which only focused on the hilarious-in-hindsight but negative comments about the startup (https://news.ycombinator.com/item?id=11786464). Naturally, it got massive retweets from venture capitalists who espouse the haters-gonna-hate attitude.

As dang notes in that other comment thread, this kind of argument doesn't look at the other side at all: there have been some seriously shady dealings going on with unicorn startups. IPOs are failing. And let's not get started on Theranos.

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Not to mention all of the unicorns supposedly worth billions that aren't IPOing. Because IPOing would finally let the public decide what they are worth (it would be a harsh wakeup call for a lot of them). Instead we're stuck with their VC cronies stuffing self-serving valuations down everyone's throats.

By the way, I too am worth 2.5 billion dollars. What?! You want me to prove it?! Get off my lawn!

>By the way, I too am worth 2.5 billion dollars. What?! You want me to prove it?! Get off my lawn!

While I agree with the first part of what you wrote, when it comes to this I can say:

You don't need to prove it (and those unicorns didn't prove it either). You just need to be able to get some millions of dollars on your 2.5 billion self-valuation, and you'll be as good as them.

Because they did that.

>You just need to be able to get some millions of dollars on your 2.5 billion self-valuation

Mathematically speaking you just need to get someone to give you a single dollar in exchange for 1/2500000000 of 100% ownership, meaning that 100% is theoretically worth $2.5 billion.

A classic post from 37signals:

PRESS RELEASE: 37SIGNALS VALUATION TOPS $100 BILLION AFTER BOLD VC INVESTMENT https://signalvnoise.com/posts/1941-press-release-37signals-...

Mathematically yes -- but for the valuation to have any meaning it should refer to a significant enough percentage.

Say their are two companies. 'Georges Growers' and 'Dave's Dilly Daddlers'.

I give 'Dave's Dilly Daddlers' $100,000 for 10% of the company. But with the condition that if it's valuation ever falls below 1 millions dollars I get 20% equity, and if the company goes bust I get paid back before any other investors, and I get the title to the founders house.

I also give 'Georges Growers' a $100,000 for 10%. But with no conditions, I'm just buying a portion of the company.

Are both of these companies worth 1 million dollars? In some sense yes, but in a much more meaningful sense no. And many recent deals have been closer to the former than the latter.

"their VC cronies stuffing self-serving valuations down everyone's throats"

Whose throats? The other VC "cronies" who are buying shares at those prices?

>VC cronies stuffing self-serving valuations down everyone's throats.

Source?

Sam's take on bubble talk from his Hard Tech is Back post said it best:

>Leave the Medium thought pieces about when the stock market is going to crash and the effect it’s going to have on the fundraising environment to other people—it’s boring, and history will forget those people anyway. There has never been a better time to take a long-term view and use technology to solve major problems, and we’ve never needed the solutions more than we do right now

Back to work!

[1]http://blog.samaltman.com/hard-tech-is-back

Well, unless your life plan is to start a Hard Tech business that will require 5 years of funding before anyone takes it seriously.

Then this is is kinda like telling a soldier about to deploy to Afghanistan that they don't need Kevlar because it's never been a better time to bring democracy to the middle-east.

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