Or it means that you're selling $2 of goods and services for $1 of cost to the customer. In traditional markets, this kind of predatory pricing was considered a

Or it means that you're selling $2 of goods and services for $1 of cost to the customer. In traditional markets, this kind of predatory pricing was considered a form of anti-competitive behaviour, but usually only large near-monopolies with deep pockets had the money to pull it off. VC allows a startup - that can't possibly be considered a monopoly - to price a product/service at below-cost for years to grow its user base regardless of ultimate sustainability. See also: Groupon, Movie Pass, WeWork, and maybe Uber. In the end it's often the VCs that choose the market leader, not the customers. Competitors that enter the market without VC backing are forced to be profitable from the start and have no way to compete on quality or price. This is especially apparent with "gig economy" startups where offering subsidies/incentives to the service providers increases the quality (timeliness, availability, coverage) of the service for the customer. In many ways it resembles a command economy, with a small number of VCs deciding what "the next big thing" is ("oh, looks like everybody wants scooters, let's pour all our capital into scooter companies").