[davidiach]

>They haven’t “won” anything yet...a high private unicorn valuation doesn’t mean success.

We could debate what "success" means endlessly, but if you're a VC, your job is to put money in companies with low valuations that will eventually end up with high valuations.

[sib]

I think the idea is that, since RH hasn't been acquired or gone public, they haven't yet "ended up" with a high valuation. It could all go away before the investors can get liquid (e.g., Theranos for a pathological example).

[JumpCrisscross]

There are deep secondary markets around late-stage venture-backed companies. Robinhood investors seeking to exit around this valuation have options.

[ryguytilidie]

Just to clarify, we're debating whether Robinhood is a success and the measure of success being used is "can early investors cash out for a gain?"

What if every company checked that box and couldn't provide lasting value beyond that? Do we still consider this a success because we're posting on a forum run by a VC?

[sokoloff]

> What if every company checked that box and couldn't provide lasting value beyond that?

How long do you think that would be a sustainable situation? A high mid to late-private stage valuation is only supported by the promise of subsequent valuations.

If every company stopped achieving those subsequent valuations, it would feed back into the private valuations.

[JumpCrisscross]

> What if every company checked that box and couldn't provide lasting value beyond that?

That would mean an overheated late-stage market. (Which recent IPO data haven’t yet made obvious is a thing.)

[argonaut]

Ignoring any one specific company for a moment, an investor consistently able to invest early and time their exits near the peak of each company's valuation would be a roaring success.

[ryguytilidie]

That's my point. We're saying that Robinhood is a success as a company because an early investor would have had a nice exit? Thats our "success" barometer?

I'm going to call BS on that one.

[dawhizkid]

Success generally means a future liquidity event...an IPO with a sustained share price well above what you bought in for or a sale.

[charlesdm]

* Your job is to put money in companies with low valuations, that you will eventually be able to exit at a high valuation.

It's all rainbows and unicorns, until someone hands you cash and you manage to exit your private, illiquid investment.

[quakenul]

A valuation is defined as an estimation of value. It's not a guarantee, it's not a sale contract, but does that make it rainbows and unicorns? Well, about as much as any other estimation around a highly complex and mostly unique construct, I would say.

It's certainly the first step towards a possible sale.

[phamilton]

The dimensions of preferences and signalling contort the actual valuation.

Remember that 409A valuations are generally drastically below preferred price. I'd be much more inclined to discuss startup valuations in the terms of 409A valuations.

[who_is_firing]

I think your job is to put money in companies with low valuations that EXIT with high valuations. Your investors won't give a crap if you do a good job of finding unicorns that eventually fissle out.