If you’re a startup heading into the Shark Tank or looking to snag any other sweet VC deal, you better know your numbers. The right valuation, especially, is key.
A site called Valuate.me aims to help entrepreneurs determine the values of their businesses using simple descriptions and market trends, but we’re not so sure this tool is even slightly reliable. The Observer put Valuate.me to the test by copying and pasting descriptions of startups that have become major companies (removing the companies’ names, of course), and the results were almost laughable.
Although the valuation predictor claims to use “highly-trained artificial intelligence venture capitalists,” market trends and data from nearly 150 real companies, it was off by millions, and in some cases, billions, with all of the companies we entered. Some examples:
Uber
Valuate.me predicted worth: $4.5 million
Most recent valuation: $50 billion, according to Forbes.
Etsy
Valuate.me predicted worth: $5.3 million
Most recent valuation: The company just went public in April with a $3.25 billion valuation, according to Yahoo.
Genius
Valuate.me predicted worth: $620,000
Most recent valuation: Just under $1 billion, according to TechCrunch.
Tinder
Valuate.me predicted worth: $4.7 million
Most recent valuation: The dating app is predicted to reach a $1.1 billion valuation by the end of 2015, according to MarketWatch.
BirchBox
Valuate.me predicted worth: $5 million
Most recent valuation: $485 million, according to Fortune.
Airbnb
Valuate.me predicted worth: $2.3 million
Most recent valuation: $20 billion, according to Bloomberg.
Coffee Meets Bagel
Valuate.me predicted worth: $26 million
Most recent valuation: The company is most often touted to have a $30 million valuation after Mark Cuban infamously offered the sum to the three sisters on Shark Tank.
HelloFresh
Valuate.me predicted worth: $2.8 million
Most recent valuation: More than $69 million, according to Business Insider.
Imgur
Valuate.me predicted worth: $23 million
Most recent valuation: $200 million, according to Valuewalk.
These valuations are clearly all kinds of messed up. What’s a “highly-trained artificial intelligence venture capitalist,” anyway?
