Money 2.0 Stuff: Making money making money

Sometimes companies raise some money at some valuation and then some people with Twitter accounts give their feedback on the process. Sometimes — rarely, sure, but I presume at least some of the time — these Twitter accounts say nice things like ‘Hey, this company just raised $Xm at $Ym valuation and, considering their success to date, it feels like a great deal for both sides!’ That would be really nice. Most of the time, however, these Twitter accounts write something not very nice. ‘Hey, this company raised $Xm at $Ym valuation but, like, they only generated $Zm in revenue over the past 12 months so I’m out’ although in reality, perhaps unintuitively, these commenters weren’t actually offered placement in the latest round.  

Thinking about this exchange through the ‘right or wrong’ framework is perhaps missing the point itself: ultimately the disagreement comes down to expected growth rates and expected margins and expectations regarding the ability to stay competitive, dynamics that will likely play out over the course of several months or years. There is a path to revenue generation, a path to profitability: the question is whether the company can successfully navigate, execute, whatever this path.