In 2006 and 2007, a lot of video content companies raised a lot of money in additional roundings. Heavy.com, which aggregates more than they produce, raised $20M on top of $10M. Others raised $32M on an additional $5M, for example.
I always wondered where investors got their comparables to justify those investments, but more power to the management teams for raising that much. Hopefully they can exit at high enough levels (ie. not pull a Movielink, basically, which sold for $20M after getting $100M in investment).
This year, we’ve seen more video startups raise substantial sums of money:
- Digital Production Studio Worldwide Biggies Receives $9 Million In Funding
- MyDamnedChannel Launched, Copies Funnyordie, Scores Funding
- Revision3 raises $8M in funding
- NewTeeVee Raises $8M financing
As the executive producer of a video producing property at WatchMojo.com, when I see that, it gives some kind of multiple for fundraising purposes… but in an M&A, how does financing affect valuation?
On the one hand, there is a clear difference between an on-the-paper valuation two parties agree to in order to raise money and grow a company… but it’s also unreasonable to assume absolutely no linear relationship between what companies get valued in financing rounds and sales, no? After all, when you determine a valuation for a company, you look at publicly traded and private companies as well as M&A. Sure, it’s awfully unfair to compare a private startup with an established publicly traded company (no matter what kind of liquidity discount you apply) but nowadays, companies tend to avoid the IPO altogether and simply sell out, so maybe private financing rounds’ valuation is a good barometer. I won’t lie, if it is, it’s fantastic for our business…
I need to do some homework on this, if anyone’s got insight, comment away or email me at ash@mojosupreme.com.
Digg this Blog
Share on Facebook
WatchMojo on Twitter
WatchMojo on YouTube
Add to Favorites
WatchMojo Newsletter
