I have a business worth $1,000. If you give me $1,000,000 dollars for 10% of my shares – that ‘values’ my company at $10,000,000 – overnight – BUT – is it really worth 1,000 times as much = just because I have convinced you that with $1 million dollars – we can conquer the world ?
More importantly – 3 months down the line – you and I convince a new dude to drop another 10 million dollars into the business – and we give him 10% of the company ….
Over night – my company is now ‘worth’ $100 million – and my original investor’s investment is now ‘worth’ $10 million – a ten fold ‘return’ in 3 months !
See what I did there ?
I am not saying that the Unicorns aren’t going to turn into something great. I am saying that there is zero oversight on this process – rather a bunch of insiders trading on Futures – with no watchdog. What could possibly go wrong ?
A curated leaderboard of companies that were at one point privately worth $1B or more and subsequently exited, either by acquisition or IPO.
Seems like a lot apparently !