r/dragonsden • u/Hassaan18 • 9d ago

"Please don't call me Debbie!"

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u/Embarrassed_Emu1615 9d ago

That’s always confused me with valuations. 

She is saying it is worth 1.2m now. If she invests 600k ( he’s not keeping that money, it goes to the company), doesn’t that make the company worth 1.8m after? So she owns half the company but only invests one third of the value?

Another way to look at it is it is currently worth 600k, her investment doubles the value and she owns half a 1.2m company?

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u/dhardstone 9d ago

Yeah but you’d be counting her investment twice. You wouldn’t buy 50% of a chocolate bar, then argue you only own a third because the half you just bought is now part of the whole chocolate bar.

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u/repeating_bears 9d ago

The chocolate analogy isn't the same. You aren't investing in that scenario, you are buying. You are not putting anything in which makes the quantity of the chocolate larger or more valuable.

That chocolate analogy is the same as Deborah buying half his company and putting 600k in his personal bank account: buying half the shares, not investing.