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Micro companies worth a billion are here

by on02 May 2012

Thank you internet

Billion dollar companies with few employees are finally with us according to analysts Magister Advisors, M&A advisors to the technology industry.

In a report the company claimed that there were a new breed of super-efficient technology companies emerging which took advantage of near-free distribution channels. The report points to the recent acquisitions and IPO valuations to prove it. 

Facebook’s acquisition of Instagram was a case study.  The company had 13 staff and was worth a billion dollars. Facebook’s value implies that each employee for its own business of $33 million.  Microsoft, by contrast, has a value per employee of $3 million.

Victor Basta, managing director of Magister Advisors, said: “The potential for this new breed of super-efficient companies to accelerate revenue generation is unprecedented. Microsoft went from zero to $1 million revenues in 3 years.  Facebook, by comparison, went from zero to $150 million revenues in 3 years, representing a 40-fold acceleration in real terms.  This will only get easier and faster for the right idea.”

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