I don’t normally remember my dreams but I remember my dream last night. We were celebrating the sale of a company in which the founders and investors had done very well. During the course of the celebration the founders explained that they sold the company because they have a bigger and better idea that they plan to do next. I asked them if they would allow us to invest in their company and they said they would consider it but that the seed round was going to be priced at $140mm pre money. I had a tantrum and stormed out. That was when I woke up.
I don’t really know what that says about the state of my mind or the anxieties I experience. But it felt like a betrayal. A slap in the face. We had worked closely together and had gotten to a very successful outcome and now the result was a crazy price that we would have to pay to stay in business together. It pissed me off.
Valuation is just a number. It’s the price you pay for your shares. You don’t know if you got a good deal for a while, but eventually you will know. But valuation is also a psychological thing. It says how much you value a person. How much an entrepreneur is valued in the market. And how much an investor is valued in the market. The clearing price reflects both sides of the transaction.
I guess that’s why that dream woke me up.