I recognize that 4x revenue is a lowball offer and she probably wouldn't take it. But a standard 10x revenue seems way too risky to me in an emerging market of teenagers. I'm sure I could find better things to put my money in, if I actually had money to invest. There's also no telling how much worse the company will do if the former founder becomes a complacent employee.
It was an "associate" of Myspace cofounder Brad Greenspan who made the acquisition over. Brad Greenspan was the guy who accused Rupert Murdoch/News Corp of defrauding investors by undervaluing Myspace. Even more insultingly they came back with an offer to give her $700,000, a car, and her own internet TV show which is clearly much worse than the previous offer.
"I recognize that 4x revenue is a lowball offer and she probably wouldn't take it. But a standard 10x revenue seems way too risky to me in an emerging market of teenagers."
That's a risk of any early stage acquisition. If you're strongly risk averse, you aren't doing this kind of deal. Every tech startup at this early stage has dozens of unpredictable variables, but when you have a strong cash flow, explosive growth, and plenty of users, the value goes way up.
It was an "associate" of Myspace cofounder Brad Greenspan who made the acquisition over. Brad Greenspan was the guy who accused Rupert Murdoch/News Corp of defrauding investors by undervaluing Myspace. Even more insultingly they came back with an offer to give her $700,000, a car, and her own internet TV show which is clearly much worse than the previous offer.