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>Even startups which are doing well and generate profit tend to go on to raise money from VCs - This sounds ridiculous So how does one expand a profitable busi

• jondubois 10y ago
  This use case you describe sounds reasonable because in that case, to produce the goods, you actually need to have a factory, and for that to happen, you need money. But how often does such a use case actually come up in the real world (in the tech industry particularly)? Not saying it doesn't happen from time to time but it doesn't seem like the standard case these days. It seems like a lot of time, VCs are just throwing money at specific companies in order to 'outfund' competitors who are also receiving money from a different set of VCs (they're all trying to run each other into the ground by artificially lowering profit margins). Eventually, everyone realizes that the funding ultimately did nothing to neutralize the competition; most of the competitors are still alive and kicking (and new ones have since spawned up) - And the market is simply not big enough to meet everyone's projections/expectations.