Valuation

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Robin argues that investment failures are part of everyday life in venture capital. People often ask why prominent VCs invested in FTX. His personal experience is that missing a good investment can have a much greater impact than making a bad one. In a portfolio of ten equally weighted investments, one failed deal costs 10%; missing a winner could mean forgoing a 10–30x return, or potentially 100–1,000x in the United States. VC is not about maximizing the success rate. That creates intense fear of missing out and a willingness to pay relatively high prices. VCs trust that time favors good companies: Facebook’s shares halved shortly after its IPO, yet it ultimately reached a market capitalization of 1.3 trillion, as the post approximately describes it.

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Robin believes Gogoro’s decision to list on Nasdaq through a SPAC was reasonable in the context of 2021–2022 and should not be judged by its subsequent share-price performance. Reports put the capital raised at US$344 million, roughly NT$11–11.5 billion. Gogoro is fundamentally a capital-intensive undertaking; in Taiwan, raising NT$1 billion in a single IPO already counts as a large deal. Robin relays a securities executive’s remarks at a seminar: Taiwan’s IPOs may be relatively small, but follow-on offerings are easy to carry out and liquidity is reasonable. SMEs can raise additional capital every two to three years, advancing through small, rapid steps. A good company may have the opportunity to grow more than twentyfold over twenty years.

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Robin uses ASPEED as an example. Its IPO offer price was NT$110, raising about NT$224 million at a listing market capitalization below NT$2.5 billion. Thirteen years later, its market value had reached NT$352 billion, meaning roughly 99% of its value was created after listing. He sees an IPO as a new starting point. Startups should not become trapped by valuation; choosing good partners and raising growth capital quickly can matter more. He recalls a statistic suggesting that US-listed companies’ pre-IPO valuations averaged less than 4% of their current value. His two lessons are to advance IPO planning promptly and avoid obsessing over every pre-IPO fundraising valuation.

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Robin believes a combined SpaceX–xAI listing is approaching, with ambitions for a trillion-dollar valuation. SpaceX reportedly has EBITDA of about US$8 billion. He subjectively assumes that depreciation, interest, taxes, and related items account for 60–80%, putting net income at about US$3 billion. With xAI still losing money, he expects the combination to be slightly profitable or slightly loss-making. To support a trillion-dollar market capitalization, he argues, Musk needs an even bigger narrative, including space-based computing centers and an enormous wafer-fab project. He also connects this with Tesla’s trillion-dollar compensation plan. Even assuming US$1 billion in earnings, the implied price-to-earnings ratio would exceed 1,000.

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On the day of a Taiwan Innovation Board forum, Robin considers the share-price performance and listing choices of Taiwanese NASDAQ-listed startups GGR and TNMG. A US listing brings challenges in attracting investors, higher listing and ongoing costs, and regulation. He personally suggests that only a sufficiently large venture addressing a substantial regional market, with a top-three position and strong growth, should challenge the US market. Others can use Taiwan’s capital markets. He contrasts the smallest Taipei Exchange-listed companies and relays a senior colleague’s estimate that maintaining a US listing costs at least an additional US$2–4 million annually.

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The opening audio-summary excerpts argue that performance is often weakest in the year after fundraising, as attention shifts from doing the work to proving the company deserves the money. Robin adds that pursuing an excessive valuation, raising capital, then failing to deliver expected results pushes a team toward a cliff. Startups do not always starve; many overfeed themselves. Immediate hiring and advertising expansion can raise expenses before the organization, product, user experience, and sales are ready. Faster cash burn then makes the next funding round a harsh test.

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Looking back at crises, this column prepares startups for a funding winter: prioritize customer revenue, concentrate on the core, and offer investors a new plan worth backing. It is a strategic view from 2025, not a real-time forecast of 2026 fundraising.

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More accessible funding, abundant incubators and accelerators, founder-friendlier terms, and AI have lowered entry barriers. Success is harder: abundant capital fuels irrational, unprofitable competition; talent costs more and is harder to retain; accelerating technology makes investors hesitate. Understanding the rules and everyone’s motives still offers a chance to win.

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Robin applies Bill Gates’s observation—“we always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next 10”—to company value. A company may overestimate its present value yet underestimate what it can become over a decade. Hypothetical reflections on ASPEED’s 2013 listing and Kaori’s 2006 listing support the conclusion: face today’s valuation rationally, do not pull future value forward, and build value step by step.

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This is an excerpt from a talk by Wang Qiang at a ZhenFund training camp; the source includes information about the institution’s activities and resources. The original post is retained in full; see the notes in the body for source details and limitations concerning figures and quotations.

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Robin uses the hot dog stand analogy to argue that founders should first identify their business’s epicenter: if you can remove something and still operate, it is not the epicenter. He then comments on Super Wenheyou, a sensation at the time: packaging can create excitement, but whether it lasts depends on the strength of the food business itself.

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This post can be compared with Master60’s Chinese summary of Lawrence Ingrassia’s book; it is not a verbatim translation of the English original. The original post is retained in full; see the notes in the body for source details and limitations concerning figures and quotations.

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Robin opens with two points: founders must tell a complete story, and venture capital peers must assess its credibility rather than buy it blindly. A summary of Billion Dollar Loser follows: investors were drawn by WeWork’s story of disrupting US$15 trillion in office real estate and by FOMO; it rewarded them with breakneck expansion, then received further encouragement from Masayoshi Son. The closing warning: the faster you charge ahead, the more alert you must remain.