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In tech, it feels like negative cash flow is valued partly for it's ambiguity. With positive cash flow, your valuation becomes easier. With negative cash flow
by ethbro 7y ago
In tech, it feels like negative cash flow is valued partly for it's ambiguity.
With positive cash flow, your valuation becomes easier.
With negative cash flow, you're either (a) strategically burning for growth or (b) unsustainable.
But you can pitch as to why it's one instead of the other. Which gives a lot of wiggle room for "early stage unicorn magic" tales.
- hef19898 7y agoI always looked at negative cash flow as default dead, regardless of profitability. Long term survival is at risk when you run out of cash to pay invoices, profits or not. All that needs to happen is financing, either by banks or investors, to stop.