I work in tech and these ludicrous valuations frustrate me even though I benefit directly from it. In our latest round our board decided to over fund the round 4x to get a higher valuation, I we don’t even have a finished beta project yet ( and still 6+ months from revenue)! There is no reasoning with them on valuations even though we are talking high 8 figure dollar amounts of investments. If you know the right people you can easily raise a couple million off an idea + strong team alone. The reason I hate it is because it’s totally unsustainable. It is creating a huge bubble in the industry, and in a few years it’s going to be impossible to get great ideas funded. The other problem is that I honestly think that no one really knows how to value these companies and their business models. When I think of FB, they have ~1.2B daily active users. We’ve never really had a company that can influence ~1/4 of the total population like that. Snapchat has ~150M daily active users, Twitter ~ 120M daily active users. That is a ton of data and monetization potential that is incredibly difficult to value. I can tell you getting a few 1000 daily active users is incredibly hard, getting a few million is near impossible, and getting a few billion has only been done once. The last thing to remember is that for most people involved in the deal it’s not a long term growth strategy. As long as they can have a solid IPO and keep the stock high long enough for the vesting schedules to finish they are thrilled. After 18 months pretty much everyone in the company has all their risk off the table and they don’t care. I remember when Twitter put the word out for their series B and there was a lot of debate if they could hold on, which would have yielded 200-300% easily. Even their friends and family round there were offers to buy $100k chunks at $12 a share pre ipo. My point being that once these hit the market, most of the gains have already been had and there’s little left for growth investors. Even looking at FB that has 200-300% returns in the market, that’s nothing compared to the massive returns made on the private side.