[axiom]

People are incorrectly thinking of this round as meaning that Magic is worth $40M. That's not how fundraising at this stage works.

The thought process is more along the lines of: - is this a VC fundable concept?

- are the founders impressive enough that Sequoia thinks they can pull it off?

- how much money does the company need to build what they need to build?

- how much does Sequoia need to own in order for them to get 10-100x return if the company succeeds?

Think of the $40M valuation as simply a back-calculated parameter based on how much Sequia needs to own with respect to how much capital the company needs and how big the opportunity could be.

The thought process is not: how much is Magic objectively worth now based on their EBITDA?

[Mahn]

> objectively worth

Is there such a thing? At the end of the day a company is worth whatever someone is willing to pay for, which is always subjective.