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Comment by korch | Hacker News Reader

I don't recall what article about startup valuations it was, but it was posted here a few months ago, and one of the pieces of advice was: when valuing a fresh, new startup(< 10 employees), deduct -$200,000 for every product/project manager on the payroll who doesn't also hack code.

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I recall that article too. It's slide 5 of the mint.com presentation http://techcrunch.com/2009/10/08/startups-101-the-complete-m...

-$250k per business guy.

And I think the argument is pretty sound. He's talking about your prototype valuation. The article is focused on post-launch. Hiring a product person pre-launch is probably a waste of money, unless you have the loot to have a 20 person team pre-launch.

So if Steve Jobs started a new company with no employees, you'd valuate it -$200,000?

I will. Steve Jobs had Wozniak partnership , without him he would be not what he is today, he wouldn't had the experience he has(he started very young), either the money and fame. He wouldn't had the opportunity to work with(and learn) from extraordinary people he has.

It was a symbiosis because odds are that Woz without Jobs will not be in a very good position. Jobs is an extraordinary seller(distortion field).

So yes, if I find a young Jobs without training and even more if it has no employees is at least -$200,000.

I not asking if you had a young Steve Jobs.

I'm saying if Steve Jobs today said, "I'm leaving Apple and starting my own company. As of today, I'm the only employee of this new company."

He comes to you and says, "I'll give you 50% share for $20" you'd say, "No. Since you don't write code, the company is only worth -$200k".

Let me cut to the chase. Valuating companies with stupid formulas, leads to stupid valuations. IMO.

Jobs is a terrible example. If he founded a company he'd be a finger snap from surrounding himself with an A-List tech team, the likes of which SV VCs only dream about. It's the fact that he could find the talent if he needed it that the valuation would obviously be greater than 0. Your point is moot.

No, that's exactly my point.

You don't say, "non-programmer equals -200k". You say, "What do they bring to the table? Oh, you have Bill Clinton on your team and you're trying to do a government services startup -- that's a pretty big plus, even if Bill isn't coding". "You're doing a Clicker like company and you have the ex-CEO of Comcast. Maybe a plus". "Doing financial services software, and you have the ex-head of IT from BofA... maybe useful, even if he is 'just' IT".

In fact, I'll say if you have a startup company in front of you who doesn't know how to judge each individual, pass on them. They'll fail.

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