The valuation metrics look at revenue growth, not sales and not profit. Wall Street loves the mystical growth metric and have cash by the fistful ready to stuff into firms that can show some sort of growth. Especially with hard-to-value tech companies, showing a strong number of users makes a marginally profitable (or even unprofitable) firm appear to be strong.
Supposing that the target is to attain the highest valuation, the right idea is to spend as much money as possible to show strong growth numbers. Then, when you hit the peak growth rate, sell it to the public!
When a more attractive professional network or daily discount site emerges, the value may dip. That being said, if the target is to make the most money, the easiest way is to ride the bubble
Supposing that the target is to attain the highest valuation, the right idea is to spend as much money as possible to show strong growth numbers. Then, when you hit the peak growth rate, sell it to the public!
When a more attractive professional network or daily discount site emerges, the value may dip. That being said, if the target is to make the most money, the easiest way is to ride the bubble