Valuation Joke

Jason Fried of 37signals (the company that provides the “not-free” web-application Basecamp, the project management software my colleagues and I use at Hammock Inc.) wrote a rather amusing post in the guise of a Press Release on his company’s blog today. In light of a $100 million VC investment at Twitter that valued the “pre-revenue” company at $1 billion, Fried wrote a release announcing that a group of investors had, well, let me quote it:

CHICAGO—September 24, 2009—37signals is now a $100 billion dollar company, according to a group of investors who have agreed to purchase 0.000000001% of the company in exchange for $1.

In reality, the valuation of anything is equal to only one thing: What the next fool is willing to pay.