By Curtis O. Robinson, Sr.
We all remember the classic tale “One Thousand And One Nights,” the exciting and absorbing spin-off of another classic, “The Arabian Nights.”
These are considered among the best of Islamic folklore as these stories continue to appear in our local movie theaters year after year.
There is the story of an old peasant worker by the name of Ali Baba who happens to stumble upon the reserve of treasure under the control of a band of Forty Thieves.
Ali Baba is a poor woodcutter who discovers the secret of the thieves’ den and entered in with the phrase “Open Sesame.” The thieves learn this, and try to kill Ali Baba. But his faithful slave-girl foils their plots. He gives his son to her in marriage and keeps the secret of the treasure.
In the world of venture capital, there are certain requirements that allow investors to predict how big an early investment could potentially be. This is called valuation.
And what valuation is designed to do is to give you, the investor, an opportunity to see how big a potential rate of return could be.
So look at it like this: let’s say that you are an event planner, and your non-profit organization is having a fish fry. You buy the amount of fish that you want to sell based on the amount of tickets already purchased.
This gives you an idea of how much money you could potentially make because of the actual indications of interest. And that is your valuation. Based on your inventory and the tickets already purchased, you now have an idea of how big or small your profit might be.
Ali Baba might be a fairy tale to some, but with a $221 billion pre-market valuation, the Chinese answer to Amazon.com is the world’s largest Internet marketplace.
How big is Alibaba.com? As a publicly traded company, Amazon has a market valuation of $152 billion dollars. Baidu.com, a Chinese search engine that is dominant in China, has a market valuation of $66 billion, and Alibaba.com hasn’t traded one share publicly.
A potential IPO could happen in August of this year.
There is a theory in processing the valuation and potential success of a new company: number one is “Go Big Or Go Home.” How big is your God? Jehovah told Joshua that he is so big that everywhere that your foot touches the ground; it belongs to you.
Now that’s big.
Curtis O. Robinson, Sr. is senior pastor of the Faith Baptist Church in Oakland and senior managing partner of Imani Nathan Capital Management, LLC. Questions or comments can be forwarded to firstname.lastname@example.org.