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Unfortunately the small candy company has a very reasonable business model, and generates stable revenues. Generating stable revenue is the worst thing that ca
by nikanj 4y ago
Unfortunately the small candy company has a very reasonable business model, and generates stable revenues.
Generating stable revenue is the worst thing that can happen to a company, because now your company can (and will!) be priced according to multipliers on fundamentals.
A pie-in-the-sky business model with 0 launched products will fetch a much higher price on the markets
- cjbgkagh 4y agoSilicon Valley HBO did a skit on the importance of ‘no revenue’ https://youtu.be/BzAdXyPYKQo https://youtu.be/BzAdXyPYKQo
- mistrial9 4y agoa concept of "cancer" comes to mind when you describe that, somehow..
- baersandbowlszs 4y agoNaturally. You may have also noticed that our economy has been growing explosively while providing less and less to most members of society. We can keep extending the analogy by saying that the Fed has belatedly started some long-overdue chemotherapy by raising interest rates, but the late stage and metastasis make for a grim prognosis.
- renewiltord 4y agoWhat’s unfortunate. It looks like someone who valued it appropriately has it and the business is in great shape. This is the whole thing: you can just beat everyone by picking better and running it appropriately. If you can’t find a path to the first, I really can’t believe you can find a path to the second.
- lupire 4y agoit's not the worst at all. it provides good recurring money or a nice exit. Sure, getting a -10 P/E on a money losing business is great, if you can exit, but that is extremely luck driven and friends driven, which is harder to break into than running a good business.