What Public Markets Taught Me About Valuation

One of the earliest lessons I learned in public markets was the difference between price and value.

Price is what the market is willing to pay at a point in time influenced by factors such as momentum, sentiment, and liquidity. Value is what the business is actually worth, based on its ability to generate cash flows, sustain growth, and create long-term returns.

During my time in public markets, this distinction shaped how I thought about every investment. The price was visible, but the value had to be assessed. That gap, and whether it would close, was where judgment came in.

When I transitioned into early-stage investing, I expected valuation to be less precise, which it is, but I didn’t expect the distinction between price and value to become even more relevant. In the absence of established metrics, startup valuations are often derived from a mix of belief, ambition, narrative strength, and precedent. The valuation is a negotiated outcome between founder and investor, and it becomes the anchor for that round. I’ve come to view valuation as the stated price for entry.

The real work of value creation starts after the round is closed. It comes from how the founder uses capital, what choices they make in the face of trade-offs, and how they build toward long-term outcomes rather than short-term noise. It may take years to know whether the price we paid reflected the actual worth of the business.

The discipline I learned in public markets, to never confuse the two, continues to guide my thinking.

Valuation is the starting point.
Value is what has to be earned, every step of the way.