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Don't forget also, it's believed that "being profitable" = "you're done with hypergrowth", at which point the whole band of capital looking for 100x unicorns mo
by ip26 7y ago
Don't forget also, it's believed that "being profitable" = "you're done with hypergrowth", at which point the whole band of capital looking for 100x unicorns moves on.
Remaining unprofitable is a part of maintaining the illusion that the company has huge upside in the future.
- atemerev 7y agoYes, I suppose this is also correct. I just wanted to reiterate that with modern creative financing, a large company can stay “unprofitable” basically forever and still keep shareholders happy.
- konschubert 7y agoThe is only true as long as shareholders believe that the company gets a return on its investments. If they believe it just destroys the money it keeps, they will start demanding a payout.