I wonder how those valuation models the VCs used deal with BTC and other cryptocurrency volatility in their pricing (aren't revenues generated in those coins?)... Sorry but does risk of 50% drawdown in currency not put some kind of cap on the multiple they pay? Then again, 50% appreciation could make the valuation look cheap. But you just don't know. Also, what kind of assumptions does it make about liquidity (or is that the whole point between the relatively huge chunk of capital - another possible explanation)?

Somebody on this thread or another said something to the tune of "well maybe they're paying for potential growth, and not just basing a price off fundamental value." This is actually exactly how VCs operate - the idea has been around awhile, most recently Nassim Taleb described it as "harvesting optionality," but in the past it's been called "asymmetric returns" and other things. Basically, potential for asymmetric returns + diversified portfolio leads to a portfolio with a more favorable risk/return profile than the regular, overall market. In theory. (<-- big emphasis..) This blog post talks about it for anybody interested: http://25iq.com/2014/04/05/the-best-venture-capitalists-harvest-optionality-dealing-with-risk-uncertainty-and-ignorance/