Uncomfortable Conversations About Valuations

Everyone has an opinion on today’s private market valuations. Everyone.The way I see it, there are only three options for investors at this point:

  1. Stop investing. This probably feels like the easiest option but, like the lottery, you won’t get a chance to win if you never play.
  2. Complain publicly. This is the worst thing you can possibly do. Your tweets might get a few clicks but, ultimately, you’ll alienate yourself from founders and never get access to the very best investment opportunities in the future.
  3. Solve for whatever concerns you most. Valuations are just one part of the term sheet, there are plenty of other levers to be pulled that might alleviate your concerns.

The particularly exciting thing about private marketing investing is that your downside risk is capped to 1X your investment but, in theory, your upside opportunity could be nearly infinite. It’s important to remember that when you find yourself tweeting/retweeting about valuations alone.