[hoodoof]

A thing is worth what someone else will give you for it.

You're asking for the core mechanism of wealth creation in technology to be dispelled.

If enough people, over a credible amount of time, say that a company is increasing in value, and if they back each such assertion with a small percentage of that stated value, then eventually said company can be taken to the public who hopefully will agree and put up their money to validate the game.

[sigstoat]

> You're asking for the core mechanism of wealth creation in technology to be dispelled.

what is, or is not referred to as a "unicorn" is not a core mechanism of wealth creation.

all they said was "I wish ... call companies unicorns when they “profit” a billion dollars a year."

obviously the valuation mechanism can't change, but we could all agree to be less impressed by noisy valuations, and more impressed by realized profits.

[Retric]

If I invest X money at Y 'valuation', but I get more than just stock such as liquidation preferences, then the stock alone it's not actually worth X money. Or if you prefer my stock + what else I get is worth X money, but the other shareholders lost something of value.

Thus the company is not actually worth Y valuation and pretending otherwise ignores the terms of the deal.

EX: If the company is nominally worth 1 billion at the time of investment, and later sold for 900 million the last investor may actually have profited via money that early investors never received.

[rdlecler1]

Most 409a valuations will value the common at around 1/3rd the price of the last preferred and of course you need to discount the preferred lower in the stack so it’s not as simple as #outstanding shares x $highest preferred unless you have a liquidity event where someone has set the price for the common shares.

[cornholio]

> A thing is worth what someone else will give you for it.

You are correct, however, selling 0.00001% of my company to some schmuck for 100$ does not mean people are willing to give me 1 billion dollars for te rest of it. Many so called "unicorns" seem to be closer to that scenario than to actually having a market valuation of 1 billion dollars.