That is true, but with the caveat that there are often terms to what investors pay.  If I invest $1,000 for 0.000000000001% of your company, but with a requirement that I am repaid $2,000 in the event of a liquidity event (plus some participation), it&#x27;s not really much of a risk for me: I&#x27;m &quot;guaranteed&quot; a 100% return.  The valuation is somewhat meaningless in this situation, except maybe in terms of marketing.