It was a lowball offer. The article says she has $70,000 a month in revenue.

Didn't mean to criticize her, but to add more information.

Anyone like to valuate her startup?

4 times revenue? So around 4 million. I'd still be surprised if she took that offer.

Her best method of growth seems to be competing with Weebly with her page generating software. I assume that unlike Weebly she'd be willing to put ads on the pages of her users, so that could also be very profitable.

Where'd you get 4 times revenue? Even that is low-ball for a company with a million in revenues and nearly zero costs. Of course, in most tech acquisitions it's not an all-cash deal and lots of stock in the new owner comes along with it.

But still 1.6 million for a company with a million in annual revenues is an offensively low offer. Whoever made it ought to be ashamed of trying to take advantage of a 17 year old girl that way. Good for her for not being overwhelmed by the big numbers. Even if sales topped out today, and she never saw any more growth, that's a business worth tens of millions over a lifetime. And, worst case, if all of the markets she deals in dry up over the next three years...she still makes enough to retire comfortably on (and a lot more than a measly 1.6 million). I suspect that with her business savvy, though, she'll be able to continue to build into new areas.

I recognize that 4x revenue is a lowball offer and she probably wouldn't take it. But a standard 10x revenue seems way too risky to me in an emerging market of teenagers. I'm sure I could find better things to put my money in, if I actually had money to invest. There's also no telling how much worse the company will do if the former founder becomes a complacent employee.

It was an "associate" of Myspace cofounder Brad Greenspan who made the acquisition over. Brad Greenspan was the guy who accused Rupert Murdoch/News Corp of defrauding investors by undervaluing Myspace. Even more insultingly they came back with an offer to give her $700,000, a car, and her own internet TV show which is clearly much worse than the previous offer.

"I recognize that 4x revenue is a lowball offer and she probably wouldn't take it. But a standard 10x revenue seems way too risky to me in an emerging market of teenagers."

That's a risk of any early stage acquisition. If you're strongly risk averse, you aren't doing this kind of deal. Every tech startup at this early stage has dozens of unpredictable variables, but when you have a strong cash flow, explosive growth, and plenty of users, the value goes way up.

>> And, worst case, if all of the markets she deals in dry up over the next three years...she still makes enough to retire comfortably on (and a lot more than a measly 1.6 million).

This thought makes the last few sentences in the article a bit offensive:

>> Just a 17-year-old and her big dreams in a pink, pink, pink world full of promise. And if they don't come true? Well, there's always college.