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Yes most companies do that on the books, including movie productions, Amazon, etc. It’s not because their business model still doesn’t work, it’s because the po
by chrischen 7y ago
Yes most companies do that on the books, including movie productions, Amazon, etc. It’s not because their business model still doesn’t work, it’s because the point of corporate income tax is to make sure the corporation doesn’t hoard money and instead reinjects it into business expenses such as payroll.
- scarface74 7y agoI realize that, but the companies I’m referring to - the VC backend companies and the YC backed public companies aren’t cash flow positive.
- chrischen 7y agoYes but my point is that if they're reporting profits it'd mean they'd have run out of things to spend money on (R&D, employees, product dev, etc). The whole point of VC funding is that so much money will go towards product dev that they'd need external funding.
- scarface74 7y agoAnd how does that apply to a public tech companies that are still losing money like PagerDuty, Dropbox, Mongo, and ElasticCo?
- chrischen 7y agoThey have the same obligation to shareholders to increase future profits, not to hoard cash, which is what income tax discourages.