It's a valuation, probably from the last funding round[1].
If investors look at a business and agree to buy (let's say) 10% of the company for $1M, then the company has been valued at $100M in a real market situation.
Valuations are not real and don't mean that much about the fundamentals of the business, but they are vital to understanding how investors view the company and what the company has to pull off to get to an exit.
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[ 2.8 ms ] story [ 13.3 ms ] threadWhere does $40B come from?
If investors look at a business and agree to buy (let's say) 10% of the company for $1M, then the company has been valued at $100M in a real market situation.
Valuations are not real and don't mean that much about the fundamentals of the business, but they are vital to understanding how investors view the company and what the company has to pull off to get to an exit.
1. https://www.dentonsventurebeyond.com/resource-center/startup...