Snap reportedly will seek a valuation of $20 billion or more when it goes public in March. But how will it justify such a lofty number, especially when it when compared to Facebook's user growth metrics?
Here's the answer from one Snap investor, who spoke to Axios on background: It's all about quality users.
Facebook was profitable at the time of its IPO, but another Snap investor says that, in the absence of earnings, the key is to prove a predictable business model and consistently hit quarterly numbers. Or, put another way, hit profitability within the time frame you say you're going to hit profitability.
Counterpoint: Of course, not everyone in the Valley is so bullish on Snap—some investors don't think the math adds up at all, as Axios's Dan Primack wrote today.
