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).
Point taken.
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
Congratulations. Your future may actually be a little brighter than some of those companies. Spend the billion well. This country needs a capital injection.
If your little blog is worth $1 billion then Manka Bros. must be worth $10 trillion.
Ummm, ok. Let’s see. A company called Storm8 just got a $1 billion valuation and they have $100 million in revenues. You say you have “low four figures” – let’s give you the benefit of the doubt and say it’s $4,000 / year. Storm8’s valuation is 10x revenues… yours would be 250,000x revenues. I just can’t seem to get there. Sorry.
Hey, listen, Ummmm, but I have real growth potential. I may grow over 200% in the next year. After that, I may grow another 500%. I may be in the triple digits for the next 10 years. Wall Street loves that shit.
But when you make an IPO and the average american does believe these valuations he reads all day, then these numbers get real.
The people who lose their money in the end are always the average people and Elevation Partners.
While I know you’re not serious and make a good point, this blog is a clear sign that the bubble is about to break. Like real estate, it wasn’t until comedians and people on main street started to really focus on the crazy valuations – after that, it was all over. Very similar at the end of the last century. People were joking about making a quick buck and stocks doubling and tripling every day. It’s a sure sign of the end.
Yeah this post is hilarious. The entire ‘internet’ sector is horribly overvalued. I actually ran the numbers- and it’s not close. I wrote it up in a post last week: http://thevaluemajor.com/gravity-and-the-internet/.
Interesting that your favorite stock in 1999 was AOL. I loved AOL then and though they were brilliant for getting the Time Warner deal. I felt bad for Time Warner because I didn’t think such a great old company of classic brands deserved the assault they received from AOL – and we know how it all turned out. Time Warner may survive in the end. AOL is dead within 2 years, IMHO. LinkedIn drives me nuts these days. I know it will fail eventually because senior management could care less about the product. You can tell from the interviews. No one can love a product that boring. They can, however, love the money they’ll make from it. But in the long run… fail.
My post here alone is worth $1 billion. so your company must be worth a lot more than that. I have not decided if I am going to sell 10% of this response to the public for $100 million or just declare that my post is worth $10 billion and sell 10% for $1 billion. Or I would be open to private equity coming in and buying me out for $1 million. That’s dirt cheap and, frankly, an insult, but I’ll take it today only just so I can go an post on other sites and hope to make more.
You really need to get laid!
You’re valuation looks just right to me. It reminds me of back when I was a stockbroker in the late 90’s & companies like CMGI were hemorrhaging $ but were trading at $290 bucks a share based on future earnings. U remember CMGI don’t u? Heck, it’s probably trading on the bulletin board or pink sheets presently.
7 years later, the bubble is still “about to break” ….good call on facebook btw lol
awesome article
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