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Certain business models require high amounts of capital in order to create leverage/growth. Think of Uber, WeWork etc. All the founders made out fabulously rich
by StriverGuy 7y ago
Certain business models require high amounts of capital in order to create leverage/growth. Think of Uber, WeWork etc. All the founders made out fabulously rich due to the ability to leverage growth on the back of VC money. Organically growing, profitable business may never need to take outside money. It really comes down to the market and growth strategy.
- goatinaboat 7y agoCertain business models require high amounts of capital in order to create leverage/growth. Think of Uber, WeWork etc The business model of selling $1 for 50c and hoping that later you’ll be able to sell it for $2 because... reasons.
- jfim 7y agoThat model works if there are economies of scale. Say that your one dollar cost at one million users is $0.80 fixed costs and $0.20 incremental cost. Adding more users will eventually make the model profitable, and this is how Facebook works, for example.