Rich vs. King in the Real World: Why I sold my company

Re:Rich vs. King in the Real World: Why I sold my company by mseebach on Monday October 19, 2009 @12:25PM (#890371)

[his friends were saying] Your company is growing 100% year over year. It's profitable and throwing off cash. Why not wait another year and let revenues double again, which will make the company six times more valuable

If the company is reliably growing at 100% (which it isn't, there's always a risk), this expectation is reflected in the valuation -- obviously, actually growing it and overcoming the risk is worth something, but it doesn't scale linearly as is suggested.

In all fairness, his following explanation actually takes this into account, my point is just that the replied to a strawman.

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Re:Rich vs. King in the Real World: Why I sold my company by bdurette on Monday October 19, 2009 @11:30PM (#891689)

It's not exactly reflected in the valuation and Jason recognized that in the comments in the article:

"If you look at smaller acquisitions like mine (i.e. not like the $170m Mint acquisition), valuations like "N times revenue" or "N times profitability" is less correlated with sales, where as "N times number of founders" is closer to what happens."

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