Tim DraperFounder and Managing Partne, Draper Associate · I back the ideas that look crazy first

Is a $20M valuation too much for a small revenue startup? 💰

23 Jan 2025 · 1 min

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1:04

Tim Draper and others debate whether a $20M valuation makes sense for a startup with $50K in revenue. One speaker points to a Silicon Valley crypto fund's $25M offer and notes that Eidos Games raised $300M on an idea alone, suggesting high valuations aren't unusual in tech.

Why your valuation is like $20 million? I mean, you're just like only $50K in revenue and you are in this business 3rd or the 4th year, and the only thing which is driving the valuation is number of years you are in the business or what? I mean, because nothing else adds up.
A couple of years ago, we were like almost finished the deal with a crypto fund from Silicon Valley, and the valuation was $25 million. It was actually our first negotiation with VC as, like, in history of Eidos Games. Some guys from Silicon Valley has raised $300 million at the stage of idea of what we have done already. And we thought that, like, $20 million value is not so big, it's actually okay for, like, companies such as us.
And we know with whom we can, like, show these guys are doing this and we're making, like, the same stuff. And you can watch their progress, what they are doing, and look for our project.