What the author is implying is that entrepreneurs seek those nice round X billion valuations, and the VCs are fine giving it to them as long as they can write the term sheet.
Remember, these valuations are not cash paid for common equity like in the stock market. It's an extrapolated total equity value based on a smaller amount of cash given for a smaller amount of preferred equity that comes with a lot of conditions such as liquidation preference and maybe even preferred dividends or, god forbid, personal founder liability.
The valuation number is really just a bullshit number and meaningless to anyone who doesn't know the entire term sheet.
Remember, these valuations are not cash paid for common equity like in the stock market. It's an extrapolated total equity value based on a smaller amount of cash given for a smaller amount of preferred equity that comes with a lot of conditions such as liquidation preference and maybe even preferred dividends or, god forbid, personal founder liability.
The valuation number is really just a bullshit number and meaningless to anyone who doesn't know the entire term sheet.