The $1 Billion Club Gets Crowded

Venky Ganesan, a Venture Capitalist at Capital Partners tells Wall Street Journal, “Everyone thinks they're smarter than the average” referring to the novel about a fictional town written by Garrison Keillor. Most of the start ups are witnessing a strong growth in terms of users as well as revenue. These companies are taking the advantage of the tech trends such as social media and mobile technologies that allows them to get huge audiences.

According to an analysis by Ganesan for his own venture he found out that channel of 20 companies are almost equal to the number of publicly traded internet companies with more than $1 billion of market capitalizations. The enlargement of billion dollar club start ups reveal that the private company valuations have become superficial and dull.

The public market valuations are simply the function of the consensus between many buyers and out of which only one investor is considered who is willing to pay the set up price. In case of Pinterest the investors did not have any base to assess the company to give out support but they were impressed with the increasing number of users. ComScore claims that Pinterest is one of the fastest growing sites because of the drastic change in the number of users from 1 million to 20 million.