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A lot of people invest their money, but they miss the most basic rule of investing:
Buy when it’s cheap, sell when it’s expensive.
It’s simple. But simple does not equal easy. The hard part is knowing what “cheap” really means and that’s where most people get stuck.
It all comes down to the question everyone should be asking: what’s the fair value of this token?
It’s a pivotal question that will help you decide whether a token is a good investment or not.
Source: MR Research Hub
It all feels kinda obvious when you see the chart above, no?
But here’s the catch: while market price charts are everywhere, fair value charts are much harder to find – and that’s what really paints the full picture of any one project.
Most people glance at a chart like this, notice the price is near all-time highs (see red line), and instantly think, “This must be too expensive”.
But, in reality, it could be one of the best times to buy. The market price is further below its fair value than it’s ever been.
So while it might look pricey, it’s actually the cheapest this business has been when you factor in the fundamentals.
👉 That’s why just looking at the price chart isn’t enough. A token might seem like a steal, but that doesn’t mean it is.
To really understand if something’s a good buy, you need to dig into the metrics that reveal its true value.
And if you’re not sure how to do that yet, don’t worry—that’s exactly what this report is here to teach you.
By the end, you’ll understand how to figure out a token’s fair price and how to create charts like the one below to uncover real opportunities—not just chase the hype.
Source: MR Research Hub
When we say “create this chart”, we don’t mean you need to literally create it from scratch. It’s more about understanding what it shows because it perfectly illustrates the key idea we’re talking about today.
Plus, the good news? We’re already creating and collecting all of these charts in our internal Milk Road Research Hub.
And eventually, we’re planning to give full access to all our PRO members. So you’ll have everything you need right at your fingertips.
In the meantime…
👉 We’re going to use real data from the traditional startup world to create a simple, standardized way to figure out what a fair valuation looks like.
PS: If you're curious about which project is shown in the chart above—well, you’ll have to stick around until the end to find out. 😉
Here is the agenda for today:
- Why investors are willing to take big risks on startups in the first place
- The key metrics that matter most when valuing a project
- How crypto startups compare to traditional startups
- What makes a multiple “fair” or “overpriced”
- How to use all of this to become a better investor
This is going to be a super useful investing lesson! So let’s dive right in.
WHY INVEST IN STARTUPS IN THE FIRST PLACE?
Let’s begin by taking a closer look at the traditional startup world, what it can teach us and what makes startup investing so attractive.
And we are going to kick off with some honest brutal truth: investing in startups is super hard. It’s not for everyone, and frankly, it shouldn't be.
👉 Only a small group of investors manage to make it sustainably profitable.
Why? Because they know the game and they’re really good at playing it.
They know that they only need a few big winners—just a handful of hits that can more than make up for all the losses and still deliver solid profits.
All of their other investments? They usually lose money. And the data makes that crystal clear.
- Up to 90% of startups fail eventually.
- 10% crash in year one, and about 70% don’t make it past year five.
- Even with venture backing, 75% never return meaningful value to investors.
- And the dream? Becoming a unicorn. But only 1% of startups ever hit a $1B+ valuation.
Great so we’ve shaken you up a bit and got your full attention.
But if the odds of making long-term profits as a startup investor are so low...
Why do people still do it?
👉 Because despite the risks, some VC funds (funds investing in startups) have delivered average annual returns of 15–27% over the past decade—far outperforming the S&P 500’s ~10% yearly return.
And that’s a pretty compelling reason for many investors. Though it’s not just about chasing higher returns, it’s also about diversification.
If your entire net worth is tied up in stocks, you might want to spread the risk by adding other assets to the mix like startups, bonds, gold, crypto, and more.
Those are the main reasons why people do it:
- Returns
- Diversification
Now let’s break down how they do it, and which key metrics top investors actually pay attention to.
HOW TO INVEST IN STARTUPS SUCCESSFULLY
Let’s take a step back for a moment.
Our goal here is simple: learn what the most successful investors do, so we can mirror their strategies and apply them in the crypto space, where almost every project is basically a startup.
Let’s finally dig into the secret sauce that all the top VC investors rely on.
To do that, we’re going to look at the Cloud 100—an annual ranking of the top 100 private “internet” startups in the world.
Why? Because it offers a clear snapshot of where the market is headed, how these companies are growing, and what kind of numbers they’re putting up.
👉 Think of it as a benchmark for the startup world—one that most serious investors know well and use to measure the performance of their own portfolio companies.
We’re going to share some of the key highlights from the Cloud 100 Benchmarks Report 2024 with you now. And share our takes later.
Here are 4 key takeaways from that report.
1/ The 2024 Cloud 100 is worth an aggregate $820 billion vs. $654 billion in 2023, representing a 25% increase year-over-year.
Looking back to 2016, the Cloud 100 companies’ valuations have grown at a compound annual growth rate (CAGR) of 31%.
Source: Bessemer Venture Partners
2/ In 2024, the average Cloud 100 company is valued at $8.2 billion — that’s a 25% increase from last year and a huge jump from just $1.1 billion back in 2016 when the list first started. At the top, the 10 highest-ranked companies have an average value of $29.9 billion each.
Source: Bessemer Venture Partners
3/ The average year-over-year growth in revenue for Cloud 100 companies is 70%.
Source: Bessemer Venture Partners
4/ The average Cloud 100 revenue multiple has dropped for the third straight year — now sitting at 23x, down from 26x in 2023. That’s a 31% drop from the 2021 peak of 34x, showing the market is still adjusting.
Source: Bessemer Venture Partners
Those are the key takeaways from the traditional startup world.
And now, with these insights in hand, we can start applying them to the crypto startup world in order to help us make better investment decisions.
Uh, Oh… 😧 The rest of this report is exclusive to Milk Road PRO members!
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WHAT’S LEFT INSIDE? 👀
- How to apply the startup world’s ‘magic formula’ to crypto projects
- How to value a crypto project using current and forecasted data
- Which model gives the most accurate forecasts
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