They're going to hit $100M in revenue; that's not profit. Their margins at their current size might be low. If they want to grow to $400M in a couple years, t

They're going to hit $100M in revenue; that's not profit. Their margins at their current size might be low. If they want to grow to $400M in a couple years, they have to spend a lot of money quickly. Particularly if they have low customer acquisition costs, but it takes 2 years to realize the full lifetime value of the customer, they would be foolish to wait for the money to come in via profits. In addition to needing more money to grow quickly, you don't want to underestimate the power of having Andreesen Horowitz or any strong investor in your corner. Look at YC, for example. $20k is nothing compared to the real value they generate through their connections and other benefits. Top tier VCs are the same - providing connections, advice, guidance, keeping you focused, and helping you navigate things in the future like more funding, an IPO, etc., things they've done many, many times, and perhaps Fab's founders never have.