Most Series C companies are worth in the 100-200M range, the one I’m at is worth 270M. How does all the value just evaporate? What happens to the companies that “fail”?
There’s no way to short series C startups, and the market is not open. It’s not an efficient market, so I wouldn’t equivocate “VC’s valuing the company at X” with “The company being worth X”. Recall that most funds don’t make money.
Even if it was an efficient market, you have to remember that VCs are black swan farming. So they’re investing in a whole bunch of companies at a valuation $x00,000,000, with the expectation that many of those will go to 0 or be lower than their valuation, in order to get their few unicorns.
Another difference beween “company is valued at X at a round” and “company is worth X” is that the valuation is effected by other terms of the deal as well.
There’s no way to short series C startups, and the market is not open. It’s not an efficient market, so I wouldn’t equivocate “VC’s valuing the company at X” with “The company being worth X”. Recall that most funds don’t make money.
Even if it was an efficient market, you have to remember that VCs are black swan farming. So they’re investing in a whole bunch of companies at a valuation $x00,000,000, with the expectation that many of those will go to 0 or be lower than their valuation, in order to get their few unicorns.
Another difference beween “company is valued at X at a round” and “company is worth X” is that the valuation is effected by other terms of the deal as well.