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Why do you not think quality startups will be effected by this? Here's a scenario for you. A company is looking to raise a Series B. They make a lot of money.
by fromtheocean 11y ago
Why do you not think quality startups will be effected by this? Here's a scenario for you.
A company is looking to raise a Series B. They make a lot of money. Close to $650k per month. However, they want to grow to 100 employees to tackle a new market with a new product. Without an influx of funding they just can't get there. So they try to raise a series B round. Because investors are super cold they simply aren't funding any companies (this is exactly what happened in 01). That company can't grow, they lose out, and eventually either fold or downsize.
- icedchai 11y agoSo they're forced to find a business model that doesn't require 100 employees. If they do, they'll be a better, stronger business for it.
- drdeca 11y agoWell, what do you mean by startup? Do you mean tech companies, or tech companies designed for fast growth at a high risk, or something else? I don't think all companies need a significant external investment to work? If a company is designed to have very low expenses, and is still profitable, that is a thing that can happen I think. I mean if you want to work for a farm go ahead and do that I guess, but I think that not all tech companies need to be startups in the "receives investment from speculators" sense?
- matt_s 11y agoThe question is, what part of that $650k per month is profit? If it is revenue and no profit is there, then that is unsustainable without VC funding, right? It's simple math. If there is some model where they need X customers and funding to get there before it is profitable, does that sound like a sound business?
- stephenr 11y ago> Why do you not think quality startups will be effected by this? It's very telling to me that you somehow equate "90% of tech jobs" with "startups"