Would you rather own Star Wars or 25% of Snapchat? What about 6% of Uber, 40% of Dropbox, or 1.3% of Facebook?
Based on the 2012 sale of LucasFilm for $4 billion, that is generally the question that many investors might be ball-parking in their heads as they walk in to see the excellent new Star Wars movie this week.
One of the the problems with enormous technology valuations is that things get abstract quickly. It is hard to contextualize what enormous valuations actually mean on any sort of human scale.
But, the Star Wars franchise offers a nice visceral—and reasonably sized—yardstick on which to measure just how much a billion dollars really is.
Saying that Twitter is currently valued at four Star Wars-es, for instance, is to me much easier to understand than saying that Twitter is worth $15 billion. And at least I would argue that thinking of Twitter that way sounds at the high-end-of-reasonable.
Astute readers of The Information would likely point out that it isn’t quite that simple. All sorts of preferred terms like liquidation preferences and ratchets make the math for private companies “base Star Wars” a bit more convoluted.
Conversely, it is worth noting that Star Wars as an asset is far more valuable to Disney, the acquirer, than it would be to the average schmo. That, along with George Lucas likely wanting to find it the best home, surely played a role in where the price was ultimately set.
However, those points aside, the movie franchise and all the associated lego, kids' costumes and theme-parks you can model makes for a great baseline for where technology valuations really are today.
And in a lot of cases “base Star Wars” makes a lot of things seem more expensive than talking about them in straight dollars.