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The valuation went up.
I needed a commitment by the end of the year, or the valuation went up.
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If the valuation goes down below the liquidation preference, the common shareholders will have their entire investments wiped out.
But if you're looking at emerging markets, one of the things you need to do is weigh where has the valuation gone, relative to the risk?
Of course, Hulu's current investors could sell some shares in the IPO, or hold onto their stakes and sell later in a secondary offering in the hopes that the valuation goes higher if they continue to improve the content they give Hulu and/or increase revenue.
Where did that valuation go?
Then came Facebook, whose private valuation went as high as $100 billion, creating a vast market for private shares.
If an investor already has equity in a company, she is aligned to make the company's valuation go up, but she might want to bridge the company; that is, give it the money it needs to keep operating until it completes its next raise.
So why has Oracle's valuation gone up by a multiple of nearly eight?
At a $20.50 price that valuation goes down to $6.5 billion.
This is the promise extrapolated during 1999 and 2000 from the first Internet investment wave when multiples and valuations went through the proverbial roof.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com