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4 instantly-gratifying thoughts about that Snapchat deal

Snapchat reportedly is raising $100 million or so at a $10 billion valuation, less than a year after raising $50 million at a valuation just shy of $2 billion. The Wall Street Journal says that venture capital firm Kleiner Perkins Caufield & Byers invested $20 million into the round, and that Yuri Milner’s DST Global quietly invested earlier this year at a $7 billion valuation.

Four related notes:

1. Snapchat doesn’t actually need capital right now. Company co-founder and CEO Evan Spiegel does, however, like to bring in new investors if he thinks they can provide some other sort of value – which is why this “round” is structured more like a series of rolling closes than a more traditional “get the lead, get co-investors, close and issue a press release” strategy. Don’t be surprised to later learn that DST isn’t the only existing shareholder to have escaped public detection.

2. I’ve seen one report suggesting that Microsoft (MSFT) may buy the company. My understanding is that isn’t happening. Moreover, I don’t see anyone buying Snapchat right now, even though everyone from Google (GOOG) to Facebook (FB) has taken a good hard look. Word is that Spiegel is mirroring Mark Zuckerberg a bit, in wanting to keep his company independent.

3. I’m a bit flummoxed by Kleiner Perkins only investing $20 million at this high a price-tag. One explanation would be that this was done from its early-stage fund, but that would be tough to imagine due to return expectations at this valuation. If from its growth fund, why just $20 million? I’ve heard the “logo-collecting” argument, but I don’t think that holds water anymore (since both LPs and entrepreneurs can see through it).

4. This is the highest-ever valuation for a pre-revenue company, topping Twitter’s 2011 round (led by DST) at around an $8 billion valuation. And that doesn’t even necessarily count, since Twitter already had a tiny bit of revenue at the time (via search engine deals) and was just a month of two away from turning on the ad spigot (already is testing, and could show prospective investors a road-map). Snapchat may turn some things on this fall, but isn’t near Twitter’s monetization maturity yet.

WATCH: Snapchat worth $10 billion

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