I did it!
So, my mom sent me a check for $50 because she wanted to buy a piece of my growing media empire. (The growing part is a yet-to-launch blog on the insane nightlife of La Canada, CA called “La Canada Nights”.)
I told my mom her share of the company would be based on a $1 billion valuation (as it seems that’s the only valuation there is for a company these days).
For that $50 she will own 0.00000005% of the company. As part of my deal with Manka Bros., I own 50% of OnMedea (valued at $500 million), Manka Bros. owns another 20%($200 million) and Khan Manka, Jr. owns the remaining 30% ($300 million). My mom’s share will come out of my piece.
While some would say this is an outrageously high valuation and a sign that we are truly in a bubble – it’s really no more ridiculous than Airbnb, LinkedIn, Zynga, Groupon, Facebook or (fill in Y Combinator’s next spin-off here).
You could argue – hey, your annual revenues are in the low four figures, Zynga makes hundreds of millions (mid nine figures).
But here’s my point: A pumped up valuation is exactly that.
The key question for the entire financial ecosystem of Silicon Valley is, why do you do it? Answer: Because you can’t stop yourselves.
A fair valuation is not even on your radar because greed and jealousy take over. ‘That guy over there is 21 and got $200 million, I’m 25 and I’m only getting $100 million? F that!’
Why is everyone so desperate to reach THE BIG $B? Is just because of that one line of dialogue in “The Social Network”? Goddamn that is shallow… oh, yeah, right… I forgot who I am writing about.
Seriously, what’s wrong with a $350 million FAIR valuation and then show the world that you can grow and be worth more? Or a $50 million FAIR valuation? This obsession with “BILLION” is going to bring the entire system crashing down in the next year or so.
Bullshit is bullshit is bullshit…
But I digress… today, yippee-ki-yay, OnMedea is worth $1 billion dollars!
Suck on it.
Jill Kennedy – OnMedea