>>One partner suggested that LearnUp was a “ten on thirty”—ten million dollars should buy a third of the company, which would then be valued at forty million. “It’s more like ten on fifteen or twenty,” Horowitz said, cutting the company’s value in half. “Or six on twelve,” Andreessen said, whittling it further. Soon after the meeting, Ringwald turned LearnUp into an enterprise company.
Can somebody help explain how these calculations work according specifically to the article? The numbers make no sense to me if I use the article's explanation of this VC verbal shorthand.
"Ten on thirty" gives a $40M valuation? How? And how does "ten on fifteen" halve the valuation - according to the article paragraph above, wouldn't that double the valuation by investing $10M for just 15%, instead of 30%-33% equity stake?
EDIT: Thank you for the replies. I appreciate the responses.
Can somebody help explain how these calculations work according specifically to the article? The numbers make no sense to me if I use the article's explanation of this VC verbal shorthand.
"Ten on thirty" gives a $40M valuation? How? And how does "ten on fifteen" halve the valuation - according to the article paragraph above, wouldn't that double the valuation by investing $10M for just 15%, instead of 30%-33% equity stake?
EDIT: Thank you for the replies. I appreciate the responses.