Pellegrino dismisses the VC method in early-stage company valuations


Winding up a long discussion on LinkedIn regarding valuation of an early-stage company, Mike Pellegrino listed why he feels the VC method doesn't work, including these key failings. The VC method…

* Relies on relative valuation methods, with invalid assumptions and survivorship biases; * Presumes an income perpetuity, which is inappropriate for early-stage companies; * Trends toward greater values, and is subject to bubbles.

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