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Why would VC's give Airbnb such much idle cash. 5.3 Billion in cash reserves is ~56 years of their current earnings. Couldn't VC's take some of that money and
by cobookman 9y ago
Why would VC's give Airbnb such much idle cash. 5.3 Billion in cash reserves is ~56 years of their current earnings.
Couldn't VC's take some of that money and invest elsewhere and get better returns on the cash than it sitting unused in a company?
- isubkhankulov 9y agoi think youre under estimating the battles Airbnb is fighting in most of its largest markets
- raiyu 9y agoThere are certainly battles they are fighting but if they have over $5B in cash reserves and are profitable to an extent that's no where near the fight that Uber was waging in China were it was burning (net loss) of over $1B a quarter.
- cobookman 9y agoSure, and if they need more money they can go to VCs. However Im suprised VCs will give them all the cash up front. Figured it'd be something like, "Hey I'll commit 1Billion in cash to your needs, however I'm currently holding it in a mutal fund myself. Let me know when you need it"
- jitl 9y ago1. When VCs gave Airbnb that money, Airbnb wasn’t profitable. 2. VCs want to own parts of a valuable, growing business. It’s probably doing more good as Airbnb shares, dollar per dollar, than any other private company.