[argonaut]

This is really inaccurate. These sort of metrics have very little relevance in seed investing. For better or worse (and some of the savviest seed investors have done ludicrously well this way), seed investing is not about your numbers; it's about the team, the market, and the idea. No reputable seed investor in Silicon Valley calculates seed valuations this way (a scaled function of Whatsapp's valuation and the startup's own user numbers).

[trcollinson]

I appreciate your dissenting view. I don't mean to say this is the only metric by which a seed fund will evaluate a business. If it was likely that there was any market for ephemeral twitter, then the per user valuation would be totally meaningless, you're right. But after looking at blast chat these would be my questions. How do you grow from 1000 users to something higher? How do you turn a profit for me? Of course if the team were amazing and the product had any hope of being pivoted into something lucrative, I would be interested. But, from the looks of it, to me, it's not.

A few other thoughts. Nothing about this post says that this group is in the valley. Not all seed investors are in the valley. Not all companies are in the valley. It's a poor assumption to think they are.

Seed investors want a very healthy return on their investment and they want it relatively quickly. You may invest $5,000,000 or $50,000,000 or whatever amount you'd like blindly in whatever increment makes you feel good. But if you don't evaluate the investments you are making, you won't he investing for long. The "Savy Silicon Valley investors" don't invest blindly.

I've been told many times when rejecting a company that I have made a poor choice because of x, y, or z. My reply I'd always the same, "feel free to pull out your own $50,000 and invest. I have plenty of opportunities." I don't mean it to sound snarky. It's just reality. Investors always have processes. This is mine.