

Discussion: Reddit worth 12.8 million dollars?  - globalrev

Guess many of you know this already. But is Reddit really worth that much? 
Their income-source is one big ad on the right that I never even thought about clicking.<p>http://sam.bluwiki.com/blog/2007/04/y-combinators-portfolio.html<p>YC Companies that have been acquired / sold:<p>Reddit
- Valuation: acquired by CondeNast for a reported $12.8 million [3].
- Equity: An initial 8% diluted to 7%, additional 3% in the first round of funding. Justification: They were initially rejected, &#38; YC didn't like their initial idea (hence the high 8%). A year after starting, reddit did seek additional capital (&#60;$100,000). At that time, I'm guessing that they had a premoney valuation of $1MM, meaning their the 8% would be diluted to approximately 7%. My guess is that YC provided at least $30,000 of the this funding, for an additional 3%.
- Invested capital: Initial $15,000 with an investment about a year later of ~$30,000
======
zacharye
"is Reddit really worth that much?" - Why not? A product is worth whatever you
can get someone to pay for it.

~~~
marvin
What the parent asks is not about value in the Syrusian sense, but whether the
aquisition price was _justified_ \- whether the acquisition will in actuality
increase Condé Net's value by more than this amount.

Obviously, whoever gave a green light for the purchase must have thought so.

~~~
ConradHex
>Obviously, whoever gave a green light for the purchase must have thought so.

You could be right, or there could be other motivations. For example, maybe
they thought the company had a one-in-five chance of being worth ten times
that much in two years, so they figured it was worth the price.

------
mattmaroon
I wouldn't put much stock in those numbers. I have no idea what Reddit sold
for, but I'm told that the numbers reported varied widely and were almost all
very wrong.

------
mpc
sure why not

