Quote Originally Posted by Harvey Specter View Post
James - I'm not saying the valuations are correct but I don't think you can draw the conclusion you are. PowerHouse were required to value it's investments at the value of the last round except in limited situations. I know Lance (Punakaiki) has moaned about this but it is the accounting standard.

They have obviously achieved something since the last round, whether it's worth $20m pre I don't know.

Disc: I haven't invested in this round as the uplift in value makes my current investment big enough for a high risk, illiquid invt. Personally I think both have great potential
It looks like the companies have been going for more than 5 years and are yet to generate any revenue and about to run out of cash. So these capital raisings are actually for life support but dressed up as being for growth.
$10m is a fantasy. That's fine for Angel investors and small capital raisings but I don't think anyone would argue that you could find a buyer for these companies at $10m.
I don't have a problem with this or these companies. It is up to each business to con vince investors.
My concern is having a publically listed entity where investors don't have any visibility on the performance of the portfolio companies and can only make their decisions from the IRR that is based off these valuations. There will be a tendency to keep portfolio companies on life support so as to delay recognising failure and a massive write-off on valuation. Investors would be severely disadvantaged not knowing what the timing of these events will be.
I'm also cynical on the timing of their portfolio companies crowd funding. All done at the same time, only requiring a very small raise to support a massive uplift in the valuations, and just prior to the announcement of an Intention to IPO.
Is there anything tangible that has happened to justify such a jump in valuation? Not according to the summary pages on equitise.