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Comment by TheGeminon | Hacker News Reader

Where are you getting that the company is worth $50m? The article says it’s a “$100 million-a-year” business

To oversimplify a company with $100MM revenues annually and costs of $120MM annually is still losing money and has a real current value of $0.

That’s revenue, which is different from company value.

Oh boy, if his 100MM/year in revenue business is only worth 50 million, most startups are _really_ in trouble.

Why yes, company valuation is uncorrelated from revenue.

By the way, this is why VCs love software startups, and drive so hard for an IPO exit.

Look up revenue multipliers:

https://www.bizbuysell.com/learning-center/industry-valuatio...

That’s pretty clearly what they’re talking about, yes.

Not really. They and others here seem clueless about multipliers less than 1.

They described a fractional multiplier. That’s their whole point.

They were posting in disbelief. You should read their comment again.

That is obviously incorrect, is English not your first language?

Most startups are growing faster than a literal grain mill, and they have good unit economics. Another customer costs little for a software company. Another customer can cost a lot for a grain mill.

These contribute to valuation.

I guess this explains Nvidia's valuation.

Revenue and company value are completely disconnected.

Yes, see "P/E Ratio" aka "Price to Earnings Ratio", which is a basic measure of how overvalued a company is.

I believe the preferred Wall Street parlance now is the "price to innovation ratio" ;-)

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