SBF

SBF @SBF_FTX

@goku_matic @Liquidcrypt0 <3 — PolitiTweet.org

SBF @SBF_FTX

@optimysterie @ftx_app ahhh thx will pass it on! — PolitiTweet.org

SBF @SBF_FTX

@BearBuster3 @FTX_Official @Brett_FTXUS @Bybit_Official have you gone to https://t.co/8rnWSzZMkb and clicked the ci… https://t.co/FIMO5IiiO9 — PolitiTweet.org

SBF @SBF_FTX

@push_hustle generally I think public markets are more efficient; but also, https://t.co/832chmwExk — PolitiTweet.org

SBF @SBF_FTX

26) If they don't, their investors complain. If the company's valuation is less than $1b, they can't invest $100m.… https://t.co/twxOCRXgkU — PolitiTweet.org

SBF @SBF_FTX

25) Of course, as soon as the investment closes, their tune changes, and your company is grossly undervalued accord… https://t.co/wGpVuUTCdM — PolitiTweet.org

SBF @SBF_FTX

24) They have to disguise it, because they're supposed to be aligned. But they often do what they can: making unre… https://t.co/gTTdMe3xcf — PolitiTweet.org

SBF @SBF_FTX

23) And so, in practice, you see a tug of war. The company paints itself in the best light it can, making liberal… https://t.co/Ly3F1eay21 — PolitiTweet.org

SBF @SBF_FTX

22) Alright, so back to the original question: How are raise valuations _actually_ determined? In some sense, you… https://t.co/CFVkFXrvHT — PolitiTweet.org

SBF @SBF_FTX

21) Where, here, "you" means "the company", and "project" means "create an excel spreadsheet with large growing num… https://t.co/kuiypLDuw7 — PolitiTweet.org

SBF @SBF_FTX

20) And, Weird Trick #3: Projections. If a company is new, its revenue probably isn't mature. So how do you value… https://t.co/T0fcOH86dm — PolitiTweet.org

SBF @SBF_FTX

19) But, responds Avalanche, what if we kept doing what we did last year -- kept minting tokens? And the problem i… https://t.co/6Y4F9IzDS9 — PolitiTweet.org

SBF @SBF_FTX

18) The $12B from AVAX is only sustained if AVAX continues to perform well. Kinda like Coinbase's market cap. So… https://t.co/RE3YzyDsBf — PolitiTweet.org

SBF @SBF_FTX

17) See, Coinbase made $6B in "recurring" revenue. AVAX's market cap went up $12B. But Coinbase's market cap went… https://t.co/yB9aOWU5un — PolitiTweet.org

SBF @SBF_FTX

16) And this gets to a weird question: Who made more this year: Coinbase, or Avalanche? Well, on the one hand, Co… https://t.co/5XVoyqIQt1 — PolitiTweet.org

SBF @SBF_FTX

15) Revenue that's expected to recur should get a large mult (20x?); revenue that doesn't should just count towards… https://t.co/BuLIAPwQR0 — PolitiTweet.org

SBF @SBF_FTX

14) Well, there is no company, really, other than BTC. It's just a company that owns 2k BTC. And that 2k BTC is w… https://t.co/qB6kzooDur — PolitiTweet.org

SBF @SBF_FTX

13) Or, to take this further: the exchange fees were $0, because there is no exchange. But it started the year wit… https://t.co/MwKZHnxS8B — PolitiTweet.org

SBF @SBF_FTX

12) Now, let's say that BTC went up during the year, so its average price was $10k but its ending price was $50k.… https://t.co/31MpI9zUBT — PolitiTweet.org

SBF @SBF_FTX

11) Well, ok, you probably assumed it made all its money from exchange fees, right? What if it charges exchange fe… https://t.co/ITZVecRD9T — PolitiTweet.org

SBF @SBF_FTX

10) Ok, let's move on to another oddity. Take Company A: a crypto exchange that made $100m of revenue last year wi… https://t.co/GKQJm91zHn — PolitiTweet.org

SBF @SBF_FTX

9) People often quote "valuation ~ 20x": but 20x what? The company would either raise at $20b, $18b, or $2b, depen… https://t.co/MhTj2CYIPt — PolitiTweet.org

SBF @SBF_FTX

8) So we run into Weird Thing #1: often companies will disguise scaling expenses as fixed expenses, and then VCs wi… https://t.co/1KZ8RfMoyY — PolitiTweet.org

SBF @SBF_FTX

7) So, in theory, you should calculate something like "net revenue" -- raw revenue minus expenses that scale with r… https://t.co/Xt9XGQkS37 — PolitiTweet.org

SBF @SBF_FTX

6) Say that instead, your "revenue" was taker fees, and your "expenses" came from maker rebates. your fee structur… https://t.co/3fZmOnikuJ — PolitiTweet.org

SBF @SBF_FTX

5) Well, it depends. Say it's a crypto exchange. If the expenses were "AWS + marketing + salaries", probably they… https://t.co/a3G3CjSqzQ — PolitiTweet.org

SBF @SBF_FTX

4) Of course you need more information to know! For one, you need to know what the relationship is between that re… https://t.co/s79PuXCzBt — PolitiTweet.org

SBF @SBF_FTX

3) At its heart, I've been trying to understand the following question: Let's say a company had $100m of revenue a… https://t.co/WoY73YA7HR — PolitiTweet.org

SBF @SBF_FTX

2) NOT INVESTMENT ADVICE — PolitiTweet.org

SBF @SBF_FTX

1) A while ago I wrote a thread on VCs: https://t.co/E9CtHt1KMU I've now been through a LOT more raising and inves… https://t.co/0IALOQASu0 — PolitiTweet.org