Understand this:
21.91 million shares of Apple were traded yesterday. That is $14,460,600,000 moving around. [1]
Now you must adjust down for HFT traders, market makers, option hedgers, futures guys and anyone else who trades massive amounts of stock each and every day. My rule of thumb is ~10% actually moves hands (rather than just being moved around).
So now we are at $1,460,600,000. Only $1.5 billion dollars actually moved around yesterday. If you had $1.5 billion dollars yesterday you could've controlled the "market cap/valuation" of 1 billion shares and half a trillion in value.
You can control the market cap of anything utilising the fact that valuation uses multiplicative leverage on stuff that doesn't exist yet. [2][3] Indeed - all those teengers you see in college at age 11? Way overvalued - come and check back in 10 years. Fallacy of exponential growth runs rampant through most of finance, and teenage "prodigies". [4]
Basically with only $1.5 billion you could control the value of $500 billion dollars worth of assets - on any one day - that's it. This is how you get bubbles. This is how you can have stock market booms and busts.
Valuation leverage allows you to bid up prices for any stock using less than 2% in actual value, selling to the next tulip buyer whenever they come in trading. [5] If you had to use 100% cash - well there just ain't enough to go around my friends!
Startups?
Invest $20K just like YC does, valuing a company at $1 million - pre-product and sometimes even pre-team! The million dollars just ain't there yet - but everybody - look yonder - valuation and investor interest over the horizon!
Venture Funds?
Instagram received a $50 million cash injection which valued it at a cool $500+ million - pre-revenue. $500 million in cash wasn't actually in the coffers (or on the horizon) but Facebook look - just look - at our valuation/predicted growth - you gotta buy us out (with cash of course). And double the price while you're at it.
~2% of the world's value actually exchanged hands yesterday on the world markets.
~0.5% of market participants actually moved the prices that the rest of the world was priced at.
Hold ~2% of the world - and control it all.
Valuation is bullshit - it's like leverage without the cost of capital.
Sources:
[1] - https://www.google.com/finance?client=ob&q=NASDAQ:AAPL
[2] - https://en.wikipedia.org/wiki/Valuation_(finance)
[3] - https://en.wikipedia.org/wiki/Leverage_(finance)
[4] - http://xkcd.com/605/