Exactly. They absolutely are judged separately.
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Posted On: 03/29/2021 7:58:12 PM
Exactly. They absolutely are judged separately.
I have posted before companies that had relatively low revenue that had billion dollar market caps. There have been plenty of companies with high valuation that weren't even sure how they would monetize.
If you look back on the history of Discord as one example that I've posted a few times over the last few years, they had very little revenues in the beginning, but what was attractive is they had a lot of users. Having a lot of users can drive high valuations. Having a lot of customers can as well.
This is from WSJ a few weeks ago...
"Mar 8, 2021 — Last year, the company generated $130 million in revenue, up from nearly $45 million in 2019, according to a person familiar with the company's finances. Still, Discord said it isn't profitable."
So $45M revenue last year and now Microsoft is considering buying them for $10B.
In 2017, this article says they had a $700M valuation with $1M of revenue
https://medium.com/tnlmedia/why-discord-was-a...65ae100f41
This site 'estimated' it to be $10M but either way, it was small
https://www.businessofapps.com/data/discord-statistics/
I know early on, they were struggling with how to make money as they don't' want to do ads. If you look at that last link above, their user base is growing nicely.
All CEOs have to talk about how they are going to grow their business. Whether adding customers, users and/or revenue. To achieve higher valuations, you have to make that clear and set expectations. Maybe the classic debate, do you set expectations low and beat, or high and...
Not saying anything until you did it will always keep a company undervalued in my opinion which may be typical with young companies.
On the opposite side, one of the beauties of being a private startup funded by VC. You don't have as many people to answer to and the ones you have to, may be too pot committed to not continue to invest more to see you through to success.
I have posted before companies that had relatively low revenue that had billion dollar market caps. There have been plenty of companies with high valuation that weren't even sure how they would monetize.
If you look back on the history of Discord as one example that I've posted a few times over the last few years, they had very little revenues in the beginning, but what was attractive is they had a lot of users. Having a lot of users can drive high valuations. Having a lot of customers can as well.
This is from WSJ a few weeks ago...
"Mar 8, 2021 — Last year, the company generated $130 million in revenue, up from nearly $45 million in 2019, according to a person familiar with the company's finances. Still, Discord said it isn't profitable."
So $45M revenue last year and now Microsoft is considering buying them for $10B.
In 2017, this article says they had a $700M valuation with $1M of revenue
https://medium.com/tnlmedia/why-discord-was-a...65ae100f41
This site 'estimated' it to be $10M but either way, it was small
https://www.businessofapps.com/data/discord-statistics/
I know early on, they were struggling with how to make money as they don't' want to do ads. If you look at that last link above, their user base is growing nicely.
All CEOs have to talk about how they are going to grow their business. Whether adding customers, users and/or revenue. To achieve higher valuations, you have to make that clear and set expectations. Maybe the classic debate, do you set expectations low and beat, or high and...
Not saying anything until you did it will always keep a company undervalued in my opinion which may be typical with young companies.
On the opposite side, one of the beauties of being a private startup funded by VC. You don't have as many people to answer to and the ones you have to, may be too pot committed to not continue to invest more to see you through to success.
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