Comments on: Beware the Spectacular B-Round Valuation

By: Why Palantir Makes My Head Hurt | Kellblog

Why Palantir Makes My Head Hurt | Kellblog — Mon, 27 Jun 2011 15:23:27 +0000

[...] I’ve blogged before about Palantir Technologies (e.g., The Next MicroStrategy, Beware the Spectacular B-Round Valuation), this will most probably be my last post about them because, since leaving MarkLogic, I am no [...]

By: Facebook Investor Peter Thiel: Palantir Is The Next Facebook Or Google - Oliver Chiang - SelectStart - Forbes

Mon, 07 Mar 2011 17:45:36 +0000

[...] million. Dave Kellogg, former CEO of business intelligence software maker MarkLogic, speculates in a blog post that “dumb money” might be involved here. “I think it means that… The [...]

By: Dave Kellogg

Dave Kellogg — Mon, 28 Feb 2011 17:07:02 +0000

Thanks Vic, I did see that this morning.

Best,
Dave

By: Facebook Investor Peter Thiel: Palantir Is The Next Facebook Or Google | Hack In The Box | Hacking and Computer security news

Mon, 28 Feb 2011 16:57:09 +0000

By: Vic

Vic — Mon, 28 Feb 2011 09:29:07 +0000

Hi Dave,

You probably know this already, but just in case you didn’t, this post just got mentioned on Forbes:

http://blogs.forbes.com/oliverchiang/2011/02/28/facebook-investor-peter-thiel-palantir-is-the-next-facebook-or-google/

Best,

Vic

By: Best of Kellblog 2010 | Kellblog

Best of Kellblog 2010 | Kellblog — Wed, 22 Dec 2010 16:51:21 +0000

[...] Beware the Spectacular B-Round Valuation [...]

By: Gibbo

Gibbo — Mon, 16 Aug 2010 10:20:47 +0000

There’s a saying; revenue equals vanity, EBIT equals sanity. Perhaps this would be fitting here given the rounds of capital raisings that they’ve had.

By: Dave Kellogg

Dave Kellogg — Fri, 02 Jul 2010 18:19:35 +0000

Ken,

The question is on what basis are you deciding that they are doing well? Big events? Fancy offices? Lots of employees? … all those things cost money.

While I’m not sure about Palantir, the go big or go home strategy basically entails creating an illusion of a successful business by effectively buying revenue at up to 100% of more losses — e.g., I’m told that Exalead did around $20M in revenues but with $20M in losses — roughly speaking that cost s$20M/year … hence if you want to keep that sort of thing going you need to raise money and lots.

Main point: “doing well” is largely about perception that can be bought. Actually doing well, imho, entails creating a sustainable business.

By: Ken

Ken — Fri, 02 Jul 2010 01:01:42 +0000

I really enjoy learning more about the equity side of the high-tech world. Why would a company doing so well take on an additional 90 Mill? I think this the 3rd or 4th round…Must be veru diluted by now.

By: Dave Kellogg

Dave Kellogg — Fri, 02 Jul 2010 00:47:51 +0000

Ken,

I have no idea, but you have hit on good point. Getting award stock options without knowing the fully-diluted shares outstanding is like getting told the amount of your salary, but not the currency — i.e., we’ll pay you 100K.

100K what? Yen? Dollars? Euros? Rupees?

So 75K stock options is basically meaningless. You need to know out of how many. Companies who decline to say are usually hiding something.