4 ms·
Don't VCs constantly fund things (social media or otherwise) that never reach profitability? Isn't that the whole gamble of "venture" funding in the first place
by nkozyra 9y ago
Don't VCs constantly fund things (social media or otherwise) that never reach profitability? Isn't that the whole gamble of "venture" funding in the first place?
The monetization aspect is supposedly solved. If I suspect you can garner audience, I posit that said audience can be translated into ad dollars at some point in the future. Only the first part is speculative. And speculation is what venture funding is all about.
- JumpCrisscross 9y ago> Don't VCs constantly fund things (social media or otherwise) that never reach profitability? The expectation isn’t perpetual. Evert company must become profitable, be acquired by someone who believes it will make them (more) profitable (or attractive to another party with that belief), or go bust.
- nkozyra 9y agoOf course. But look at the context of my reply: > More and more these social media platforms feel like scheme's. Round after round of funding without ever reaching profitablity Nowhere did I say we're looking at perpetual return on investment. Like any investment, you're looking to go in at a certain point and get out at a certain point. This is no more a "scheme" than buying a house and hoping it increases in value or buying a lottery ticket. The underlying value is audience. Some companies get that, others don't.