[lmeyerov]

You should always be able to know revenue, so valuation is x 2 if a consultancy and x 10 if software. Likewise, increase/decrease based on whether revenue is doubling/tripling annually or not. The average multiple goes up and down all the time, so don't fixate on the value this month / year, as an exit, if any, can be many years out.

Nowadays typical to have no participation multiple, just 1x preferred shares ("first money out"), so you can add up the money raised, which is often ~public

Ex: a co that raised a total of $100M on $10M revenue... returns you nothing. They can call themselves a unicorn but that's between them and the investors. The investors, through preferred shares, own all the current market value.

Also, ultimately, this is all funny money. A company no buyer wants is worth nothing. Likewise, if some sort of existential PR bet by the acquirer, the acquisition $ can be magnitudes more than any sense of team/IP/revenue $, like the early acquisition of Cruise.

[asimpletune]

It becomes even weirder when you consider that big vc’s can send you business from other companies they’ve invested in, or those of their friends. Suddenly, it’s like your value just went up 10x the sales price. Basically vc’s become like market makers, and startups are somewhere in between crypto and publicly traded companies. There are key differences though, like that startups can actually create new value and bring in new money to the ecosystem, or that there are real regulations to speak of, or that vc’s are usually protected and get cashed out first. All of these things influence the real valuation.