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How did Bezos retain so much given their low margins? In today's age you would have had a lot of dilution even with a lot of revenue.
by rdlecler1 10y ago
How did Bezos retain so much given their low margins? In today's age you would have had a lot of dilution even with a lot of revenue.
- mathattack 10y agoHe was ruthless about keeping overhead low. Low margins kill you when you have higher fixed costs. He also didn't need to share as much with co-founders. They also had their IPO much earlier in the corporate life cycle than companies do today. His dilution happened with and after the IPO.
- rdlecler1 10y agoIPO is also a dilution event, as are any subsequent offerings. Still surprising given their capital needs to grow quickly that he retained so much.
- Snowdax 10y agoThe best businesses need to raise less money because they can fund themselves via profit or manage burn rate to a high degree via cost cutting. If you don't do one of those, you will need to raise more outside capital. Thus sell more of your company. Notice how the most successful companies have leaders who sold the least of their ownership? There's a reason it correlates. Revenue is not profit. Only reason Amazon had so many losses over quarters during the years because it was a managed tax avoidance measure, not because they had unfixable costs.