Instacart has grown incredibly and it has created a lot of value. However, can we talk about how and why did AZ16 and Sequoia invested at 39B valuation 2.5 years ago. Down 80% in 2.5 years. I would like to know what were the calculations and mental gymnastics they did to rationalise the valuation. Did they really expect Instacart to be a 100B+ company?
VCs are not gods. Error in judgement happens to everyone. Particularly true if you have FOMO.
These are not any VCs and they should not be susceptible to FOMO that is literally the inly job they have.
VCs do FOMO because the employees who are in charge of making investment decisions need to show the LPs they are doing their job. They might have proceed much more cautiously if they use their own money.
Bag holder
😆
Printer was printing money 2 years ago
Despite of that there should be a model rationalising the valuation. I just cannot figure out what could it be.
Let’s say you have a bad idea to start a business. You can only deliver 5% return every year. With low interest rate, you can put a leverage on your bad idea, and turn it into highly profitable business with ridiculous growth. But when interest rate is high, it is still a bad idea.
I wonder the same. It’s all the COVID cash they are trying to just invest. They right down engulfed many Employees with them
A16z is a meme tbh. They invest in everything they don’t give af 😂
The vibe I get is that Marc is smart but the problem is he thinks he is way smarter than he actually is.
a16z crypto 👀
Both crypto and VCs play on the same thing: if I pay $1 for .0000001% of your company congrats you now are worth $1B. It’s not a thing where they actually calculate and care about projected cash flow 10 years out
This. You can never be sure what a private company is worth unless you are a privileged insider.
Hard to predict valuations with such crazy monetary and fiscal changes.
Someone sold snake oil, and someone bought it at a high price.
Still overvalued
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Their service is too expensive. They need to read Jeff Bezos’s book and learn leadership principles.
They should just go all in on ads which is very profitable for them already. Use the delivery service to get people in the door.
That’s old school play relying on low interest rates. Even Meta had to do lots of efficiency work to defend its valuation now.