Do you know Quora.com ?

P

patates

Banned
Sep 19, 2011
134
5
0
This is old news actually but If you know about Quora.com, can you explain me how the fuck does quora.com deserve the valuation of $86MM?

Quora Has The Magic: Benchmark Invests at $86 Million Valuation | TechCrunch

Quora is a Q&A site that's answered by experts, not idiots

Quora co-founders Adam D’Angelo (L) and Charlie Cheever (R).
Company: Quora
Founder: Adam D'Angelo, Charlie Cheever
Location: Palo Alto, CA
Funding: ~ $11 million at $86 million valuation
Why it's innovative: Quora re-imagined Internet search and answers. It created a platform where credible industry experts are happy to respond to the average Joe and share what they've learned.
It's the only place on the web where users can get advice from people they admire and respect.


Read more: 20 Innovative Startups
Click to expand...
 


patates said:
can you explain me how the fuck does quora.com deserve the valuation of $86MM?
Click to expand...

Total # of shares in Quora: X
Total # of shares purchased by Benchmark: Y

Y = $11 Million
X = U

Y/X = ($11,000,000)/U
U = $86,000,000

There's how they get the #. Pretty straight forward.
 
tangy said:
Total # of shares in Quora: X
Total # of shares purchased by Benchmark: Y

Y = $11 Million
X = U

Y/X = ($11,000,000)/U
U = $86,000,000

There's how they get the #. Pretty straight forward.
Click to expand...

First of all, you're not answering the question. Secondly, you define X and Y as number of shares, but you denote them in currency. Third, U could be anything in your mathematical equations. Given that X = U, as you assume, your equation "Y/X = ($11,000,000)/U" doesn't guarantee that U = $86,000,000.
 
tangy said:
Total # of shares in Quora: X
Total # of shares purchased by Benchmark: Y

Y = $11 Million
X = U

Y/X = ($11,000,000)/U
U = $86,000,000

There's how they get the #. Pretty straight forward.
Click to expand...


63810-0
 
knukk said:
First of all, you're not answering the question. Secondly, you define X and Y as number of shares, but you denote them in currency. Third, U could be anything in your mathematical equations. Given that X = U, as you assume, your equation "Y/X = ($11,000,000)/U" doesn't guarantee that U = $86,000,000.
Click to expand...

Forgot me brackets, I did:

(Y/X) = ($11,000,000/U)

If you know Y and X, then you know U. That's how the valuation is calculated, which was his question.

You already know the ratio of (Y/X), since U is $86,000,000:

$11,000,000 / $86,000,000 = 12.79%

So, Benchmark bought 12.79% of the entire amount of shares in Quora for $11,000,000. This is what leads to the "valuation" figure; the total number of shares was (at the time) considered to be $86,000,000 based on the individual price that Benchmark paid per share.
 
tangy said:
Forgot me brackets, I did:

(Y/X) = ($11,000,000/U)

If you know Y and X, then you know U. That's how the valuation is calculated, which was his question.

You already know the ratio of (Y/X), since U is $86,000,000:

$11,000,000 / $86,000,000 = 12.79%

So, Benchmark bought 12.79% of the entire amount of shares in Quora for $11,000,000. This is what leads to the "valuation" figure; the total number of shares was (at the time) considered to be $86,000,000 based on the individual price that Benchmark paid per share.
Click to expand...


I will place this here: PRESS RELEASE: 37SIGNALS VALUATION TOPS $100 BILLION AFTER BOLD VC INVESTMENT - (37signals)

tl;dr: Pre-IPO valuations don't mean much.
 
tangy said:
Total # of shares in Quora: X
Total # of shares purchased by Benchmark: Y

Y = $11 Million
X = U

Y/X = ($11,000,000)/U
U = $86,000,000

There's how they get the #. Pretty straight forward.
Click to expand...

tangy said:
Forgot me brackets, I did:

(Y/X) = ($11,000,000/U)

If you know Y and X, then you know U. That's how the valuation is calculated, which was his question.

You already know the ratio of (Y/X), since U is $86,000,000:

$11,000,000 / $86,000,000 = 12.79%

So, Benchmark bought 12.79% of the entire amount of shares in Quora for $11,000,000. This is what leads to the "valuation" figure; the total number of shares was (at the time) considered to be $86,000,000 based on the individual price that Benchmark paid per share.
Click to expand...

You're not serously think that I need explanation of a mathematical equation, do you?...

I'm asking how and why quora valued that much.
 
tangy said:
Forgot me brackets, I did:

(Y/X) = ($11,000,000/U)

If you know Y and X, then you know U. That's how the valuation is calculated, which was his question.

You already know the ratio of (Y/X), since U is $86,000,000:

$11,000,000 / $86,000,000 = 12.79%

So, Benchmark bought 12.79% of the entire amount of shares in Quora for $11,000,000. This is what leads to the "valuation" figure; the total number of shares was (at the time) considered to be $86,000,000 based on the individual price that Benchmark paid per share.
Click to expand...

It's not about the brackets. They don't change anything. Let's take the mathematics first:

The question is how they arrived at their valuation, which you term U. You say that X = U. Now, in your equation "(Y/X) = ($11,000,000/U)" you have divided by X on the left side and by U on the right side. You already assumed X = U, so you're dividing by the same value on both sides. The only real number X and U cannot be is zero, because Y/X and $11,000,000/U are not defined for X = U = 0. Other than zero, X and U can hold any value of a real number as long as they're equal (since X = U in your setup). The point is, when you divide by X and U on the equation sides the division is the same on both sides and you can remove the divisions. You are not able to conclude that U is $86M from your equations. You are effectively left with the quation that X = U. But X = U doesn't give you any value for X or U. You then say you know the ratio of Y/X since you know U. But U was the unknown to begin with. Then you go on with percentages, but you are argumenting after the fact.

Now, the question was "how the fuck does quora.com deserve the valuation of $86MM?". The question is why the acquirer would value the business at $86M in the first place, a question that you're not answering. You are only answering how the full valuation at $86M is implied from valuing 12.79 % of the company at $11M.
 
knukk said:
It's not about the brackets. They don't change anything. Let's take the mathematics first:

The question is how they arrived at their valuation, which you term U. You say that X = U. Now, in your equation "(Y/X) = ($11,000,000/U)" you have divided by X on the left side and by U on the right side. You already assumed X = U, so you're dividing by the same value on both sides. The only real number X and U cannot be is zero, because Y/X and $11,000,000/U are not defined for X = U = 0. Other than zero, X and U can hold any value of a real number as long as they're equal (since X = U in your setup). The point is, when you divide by X and U on the equation sides the division is the same on both sides and you can remove the divisions. You are not able to conclude that U is $86M from your equations. To give another example, say 1/A = 1/B and that A = B. What is the value of U in that setup? You are effectively left with the quation that A = B. But A = B doesn't give you any value for A or B. You then say you know the ratio of Y/X since you know U. But U was the unknown to begin with. Then you go on with percentages, but you are argumenting after the fact.
Click to expand...

lolwut. You know X=U=$86,000,000 because it is clearly stated in the article that it was invested in at an $86,000,000 valuation (which is what X and U are defined as).



knukk said:
Now, the question was "how the fuck does quora.com deserve the valuation of $86MM?". The question is why the acquirer would value the business at $86M in the first place, a question that you're not answering.
Click to expand...
Because they think they will get a return of more than $11million on their $11million investment.
 
cardine said:
lolwut. You know X=U=$86,000,000 because it is clearly stated in the article that it was invested in at an $86,000,000 valuation (which is what X and U are defined as).




Because they think they will get a return of more than $11million on their $11million investment.
Click to expand...

As I added to my last reply: "You are only answering how the full valuation at $86M is implied from valuing 12.79 % of the company at $11M."

But that is not the question. The question is, why would Benchmark value Quora at $86M to begin with? Why is Quora worthy of a $86M valuation? That is the question. It is not how the article writer comes to the fact that 12.79 % of the company valued at $11M implies a $86M full valuation.
 
ly2 from WF said:
not a profit in sight
Click to expand...

Witchcraft! Everyone knows you don't invest in companies that have profits!

Venture Capitalists Startup Checklist:

1) Does it have "ly" in the name? (spreedly, sprintly, bit.ly, recurly)
2) Does it share photos like 20,000 other photo sharing apps?
3) Does it NOT solve any of societies/industries more pressing issues or larger problems?
4) Does it have no chance of making a profit anywhere near its valuation?
5) Can we sucker another company into buying it?
6) Can we reach an IPO making us richer while simultaneously making investors post IPO lose their shirts?
7) Can we use catch phrases like "user engagement" and "positive traction" to push up the price?
8) Is it a daily deals site?
9) Can we turn it into a daily deals site?
10) Have the founders started with the model of "free" with monetization planning being reserved for later?

If the answer is yes to any of the above cut an obscenely large cheque forthwith.

Sections 3, 4, 5, 7, and 10 answer the OP's question.
 
cardine said:
Because they think they will get a return of more than $11million on their $11million investment.
Click to expand...
That's not really an answer to the question. You're just switching out words. You could also rephrase the question to: "Why would Benchmark think they would get a return on their $11M investment for a 12.79 % share in the company?"

The OP is wondering what the underlying fundemental reasons are for valuing Quora as Benchmark did.
 
knukk said:
It's not about the brackets. They don't change anything. Let's take the mathematics first:

The question is how they arrived at their valuation, which you term U. You say that X = U. Now, in your equation "(Y/X) = ($11,000,000/U)" you have divided by X on the left side and by U on the right side. You already assumed X = U, so you're dividing by the same value on both sides. The only real number X and U cannot be is zero, because Y/X and $11,000,000/U are not defined for X = U = 0. Other than zero, X and U can hold any value of a real number as long as they're equal (since X = U in your setup). The point is, when you divide by X and U on the equation sides the division is the same on both sides and you can remove the divisions. You are not able to conclude that U is $86M from your equations. You are effectively left with the quation that X = U. But X = U doesn't give you any value for X or U. You then say you know the ratio of Y/X since you know U. But U was the unknown to begin with. Then you go on with percentages, but you are argumenting after the fact.

Now, the question was "how the fuck does quora.com deserve the valuation of $86MM?". The question is why the acquirer would value the business at $86M in the first place, a question that you're not answering. You are only answering how the full valuation at $86M is implied from valuing 12.79 % of the company at $11M.
Click to expand...

Maybe he should ask this question on Quora.
 
Not that big of a valuation really. They've just gotten enough traction and big name backers to get to the third or fourth investment round and it's time to put in $11 mill more. They've probably been diluted 30% or more already and they need the $11 million but if they valuated them much lower they would dilute the founders and executives stock so much as to mess up the control of the company.
 
You must log in or register to reply here.
Top Bottom