Let us say you want to invest in winners.
Winners will go 10x or 100x.
Ram Shriram invested in Google at 25mm valuation or so, and now it is 100 bn. That’s 4000x.
So let’s say you want that.
Actually, let’s say you found that. This company is that. Holy shit; they rule.
What’s the right price?
My genius friend at dinner puts it this way.
And the answer is: who cares? Let’s say they are a year ahead of their results.
Well a year for a 4000x company is…. 112% annual growth for 12 years.
Or 10% per month approx. Well overpaying by 30% on a deal like that is like paying the June price in April. Or, even better, locking in access to the June deal a few months early.
These are deals you want to do.
So let’s say they are a year ahead of their results. They are asking 100% higher price. Well if you are right and they are great…it won’t matter soon. And if you are wrong then the money is lost in a lower performing deal. Also won’t matter.