MedVee's use of 800 fake doctor accounts and alleged spam generated huge sales. However, the resulting FDA warnings and lawsuits create immense regulatory risk, driving the company's long-term enterprise value near zero. This mirrors the playbook of illegal vape companies that prioritized rapid, unsustainable growth over compliance.

In the mid-2010s, VC-backed media like BuzzFeed operated under a "growth at all costs" mandate where achieving profitability was seen as a failure to spend enough on expansion. This created an unsustainable competitive landscape for privately-owned, profit-focused businesses that couldn't afford to "sell $1 for 50 cents."

DFJ Growth passed on a pre-revenue LinkedIn at a $1B valuation because they lacked a clear revenue signal. This highlights a common VC pitfall: over-indexing on current financial metrics and under-valuing powerful network effects and analogous, proven business models from other tech giants.

Semafor's $30M fundraise at a valuation of 165 times its EBITDA highlights a key principle in modern media investing. At this stage, metrics like growth rate, audience influence, and strategic impact are far more important drivers of valuation than traditional financial multiples.

Despite being the gold standard for digital transformation in news, The New York Times remains a small business with modest revenue compared to tech platforms. This demonstrates that even the best-case scenario for a news organization is not a high-growth, high-margin enterprise, capping the industry's investment appeal.

Instead of forecasting growth to justify a valuation, take a company's current market cap and work backward to find the implied revenue growth. This makes the market's embedded expectations explicit and easier to scrutinize.

Semafor's CEO justifies its valuation by calculating it against next year's projected revenue, not last year's actuals. This forward-looking multiple makes the valuation appear cheaper than competitors like Axios and Politico at their exits, especially given Semafor's higher growth rate at a younger age.

Venture capitalists may value a solid $15M revenue company at zero. Their model is not built on backing good businesses, but on funding 'upside options'—companies with the potential for explosive, outlier growth, even if they are currently unprofitable.

Public market investors view revenue multiples as a shortcut to estimate a company's future earnings. A 6x revenue multiple implies a 20x earnings multiple once the business reaches 30% margins. This mental model shows that profitability and cash flow, not just revenue growth, are the ultimate drivers of valuation.