There seem to be new metrics in place to value and evaluate businesses. I have heard this referred to as the “Unicorn Syndrome”. There are mythical valuations of businesses that have special valuations that are defying traditional measures.
Some of those named in the past include: Uber, AirBnb, SnapChat, China’s Xiaomi, DropBox and Pinterest. They do not seem to be valued through a normal valuation process.
So are theses to be the new metrics that matter most? DO we now set the bar ridiculously high for the next generation of entrepreneurs?
Just remember the well moneyed investors are always driving things back to the traditional buzzwords for their investments: “revenue,” “customers,” “cash flow,” and “business model.” They want their returns and the ability to get their principal out quickly if they believe the investment is tanking.
Solid business principals should be in place. For assistance with these contact us.