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> A solid business model doesn't require this sort of continuous cash infusion. Where is this assumption that this cash is required coming from? A very common

> A solid business model doesn't require this sort of continuous cash infusion. Where is this assumption that this cash is required coming from? A very common use for investment is to accelerate plans which would otherwise unfold over long/impractical timelines. Another common use is to get ahead of competitors. I know much of HN is very eager to see all billion dollar valuations deflate so as to prove that extremely conservative risk profiles are the only strategies worth considering, but there's nothing inherently troubling about a highly-valued, late-stage company raising so much money.

_audakel 10y ago
> much of HN is very eager to see all billion dollar valuations deflate where do you get this from? HN is news for the people building startups and I would imagine they like high valuations :)
- koolba 10y ago
  > where do you get this from? HN is news for the people building startups and I would imagine they like high valuations :) Nah most of us are getting the popcorn ready.
Retric 10y ago
Loans are vastly cheaper than selling stock. Companies sell stock when they are overvalued, they take loans/issue bonds when they are undervalued.
macspoofing 10y ago
>but there's nothing inherently troubling about a highly-valued, late-stage company raising so much money. Maybe not troubling, but interesting. There's definitely something interesting there. For one thing, nobody wants a representative of the Saudi government to sit on their board and yet they took their money. Clearly they didn't have a lot of suitors willing to dump money on them and clearly they had some (major?) need of capital.
- koolba 10y ago
  > For one thing, nobody wants a representative of the Saudi government to sit on their board and yet they took their money. Says who? If you want to expand in the Middle East then having high level officials with skin in the game is a plus. I wouldn't put it past them to ban the competition and pressure their allies accordingly.
- dragonwriter 10y ago
  > For one thing, nobody wants a representative of the Saudi government to sit on their board I think there is a faulty assumption here; I don't see much evidence that the Saudi government is treated as some kind of pariah investor that everybody wants to avoid being represented on their board, such that they have to offer substantially more favorable terms or be the only player around before people accept their money.
- morgante 10y ago
  > For one thing, nobody wants a representative of the Saudi government to sit on their board and yet they took their money. Why do you assume that? It guarantees them favorable treatment in a growing market.

_audakel 10y ago

> much of HN is very eager to see all billion dollar valuations deflate where do you get this from? HN is news for the people building startups and I would imagine they like high valuations :)

koolba 10y ago
> where do you get this from? HN is news for the people building startups and I would imagine they like high valuations :) Nah most of us are getting the popcorn ready.

Retric 10y ago

Loans are vastly cheaper than selling stock. Companies sell stock when they are overvalued, they take loans/issue bonds when they are undervalued.

macspoofing 10y ago

>but there's nothing inherently troubling about a highly-valued, late-stage company raising so much money. Maybe not troubling, but interesting. There's definitely something interesting there. For one thing, nobody wants a representative of the Saudi government to sit on their board and yet they took their money. Clearly they didn't have a lot of suitors willing to dump money on them and clearly they had some (major?) need of capital.

koolba 10y ago
> For one thing, nobody wants a representative of the Saudi government to sit on their board and yet they took their money. Says who? If you want to expand in the Middle East then having high level officials with skin in the game is a plus. I wouldn't put it past them to ban the competition and pressure their allies accordingly.
dragonwriter 10y ago
> For one thing, nobody wants a representative of the Saudi government to sit on their board I think there is a faulty assumption here; I don't see much evidence that the Saudi government is treated as some kind of pariah investor that everybody wants to avoid being represented on their board, such that they have to offer substantially more favorable terms or be the only player around before people accept their money.
morgante 10y ago
> For one thing, nobody wants a representative of the Saudi government to sit on their board and yet they took their money. Why do you assume that? It guarantees them favorable treatment in a growing market.