It is easy to be a critic of private venture backed companies valuations as these investments are done considering where the world could be in the future vs where it is now. These kind of bets requires not only financial models but also unique vision and a lot of guts -- traits hard to train but present in most of mankind's big achievements. So it's no wonder those bets pays really well when they succeed.
Of course, if you're not a fan of how the private venture backed companies game works, you can always do a traditional business and use profits as the only source of growth. That's the beauty of our current system: it's not perfect but it still allows you to choose whatever path you want to and still have a good chance to make it work.
Quite. Facebook's net income for 2014 was about $3B and it's current market cap is $294B. I'm not saying it's current market cap is sensible, that's for the future to decide, but looking at the historical facts clearly it's valuation at $33B in 2010 has turned out to have been well judged.
[+] [-] rl12345|10 years ago|reply
Of course, if you're not a fan of how the private venture backed companies game works, you can always do a traditional business and use profits as the only source of growth. That's the beauty of our current system: it's not perfect but it still allows you to choose whatever path you want to and still have a good chance to make it work.
[+] [-] simonh|10 years ago|reply