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I've been thinking about venture funding and how companies do not turn a profit while growing. Wouldn't using funding to sell a service/product under the marke
by pengstrom 7y ago
I've been thinking about venture funding and how companies do not turn a profit while growing.
Wouldn't using funding to sell a service/product under the market value be considered anti-competitive? I mean the businesses without funding would have to price their services high enough to turn a profit, while venture-backed businesses do not.
Are there not chat services that would have thrived if Slack did not offer one for free/relatively cheaply? What happens when Slack wants to increase prices, but the market competitors have diminished in the meantime?
- kortilla 7y agoNo, being competitive and pushing down prices for consumers is not viewed as being anti-competitive. Whether a company makes money or not is its own problem. VC vs bank loan vs bootstrap is the same. Build a working product that brings in enough money to profit before you run out of cash. It’s basically how every business started.
- vlovich123 7y agoPredatory pricing is generally considered illegal. The US happens to hold a pretty skeptical view on the matter. The better truth is that startups/new businesses are just too small & by the time they get big their prices typically have adjusted to not be flooding the market (i.e. too late).
- ummonk 7y agoIt is priced sustainably already. They lose money due to sales and marketing, which they could scale back to operate a profitable business (but grow more slowly).