Rumor has it that Dropbox, another one of America’s fastest growing companies, is raising its next round of financing, and once again the investing public is not invited to the party.
Dropbox is expected to privately raise $250M at an anticipated $8B valuation, or approximately 68 times 2012 revenues. This begs the question, what will Dropbox’s valuation be when it finally IPOs and gives the public the chance to buy its shares? Will it be at a $16B valuation? A $25M valuation? And at what revenue multiple will the minions have the privilege of serving as the exit strategy for today’s fortunate investors? Only time will tell.
I implore those who continue to scream from the rooftops warning us of the perils of crowdfunding to think long and hard about the dangers of an unjust market structure that curbs upside potential for the majority of the population. I, for one, would prefer to have the freedom to make a poor investment decision than not be granted that right at all.