Valuation are not very meaningful pre-IPO I suppose because there are a lot of downside. So you can invest $1M at a $1B valuation, sell the company for $30M and still come out with $XX millions.

I guess the same is not true for the average person who buys into a public company. Because if you buy at $1 and tomorrow it is worth $.32c I do not see how you will not loose money.