More on valuations

Fenwick & West LLP put together another survey on the state of Unicorn financing.

Here are the most important bits:

1. Entrepreneurs are becoming managers of companies instead of owners. The exit preferences really show that the investors are buying the company with an option to sell.  
2. Employees are really going to get screwed. Unless these companies are going to IPO investors are getting premium talent at a discount that only gets covered post IPO. And for employees who are looking at 10b exits these are rarer than a unicorn.
3. Valuations are rigged to make the company look bigger to convince employees that the risk is lower so they join. We’re not an early stage startup we’re a big established company with massive stock upside (if and only if we net 10 billion post IPO)… Take this lower salary and smaller stock package because it’s a sure thing ™… Except it’s not.

Net net the game is rigged.