The incredible dollar valuations on tech startups often eclipses established names, but just how are the figures worked out? Slightly differently, as it appears.
“For Uber to get to $40 billion or Airbnb to $20 billion, you’d need to get a little creative with the variables underlying that logic. Since private tech companies often lack earnings or enough historical data to inform projections—or, in the case of Snapchat, any significant revenue—investors can’t rely on the metrics available for public companies. If there were a math problem for determining a tech startup’s valuation (for the record, there isn’t), it might look like this:”