> One interesting thing about the high valuations of tech startups now is where the money is coming from. It's not stock markets.
See, I think that it is coming from the stock markets. These valuations are there because the investors think that they can dump the stock onto the market for above that amount. Look at KING--investors in KING knew that the jig was up, they dumped it onto the stock market and got out.
$10bn valuations are possible because of the public markets. If the investors weren't extremely optimistic that the stock market will eventually buy their stock for more than that valuation, they wouldn't do the investing. That's the only time they'll get their money back. Make no mistake: they're (VCs) not in it to keep it private and to keep the profits to themselves. They're in it to take it public or get bought by someone even bigger. That's all it is.
The stock market is their end-game, and that's what they're targeting with these investments. The intermediate money isn't coming from it, but ultimately that's where the money comes from, in my view.
See, I think that it is coming from the stock markets. These valuations are there because the investors think that they can dump the stock onto the market for above that amount. Look at KING--investors in KING knew that the jig was up, they dumped it onto the stock market and got out.
$10bn valuations are possible because of the public markets. If the investors weren't extremely optimistic that the stock market will eventually buy their stock for more than that valuation, they wouldn't do the investing. That's the only time they'll get their money back. Make no mistake: they're (VCs) not in it to keep it private and to keep the profits to themselves. They're in it to take it public or get bought by someone even bigger. That's all it is.
The stock market is their end-game, and that's what they're targeting with these investments. The intermediate money isn't coming from it, but ultimately that's where the money comes from, in my view.