4 ms·

All businesses are used to certain range of interest-rate for the last 20 years.

thfuran 3y ago
Sure, but most businesses at least try to be profitable, whereas many in tech were fundamentally untenable without a constant injection of external capital to prop up a venture aiming only to grow rather than to actually be sustainable.
- cableshaft 3y ago
  Still blows my mind that Uber's first reported quarterly earnings that showed a profit in its entire history was Q2 2023[1]. And the company was founded in 2009. They've been losing money for well over a decade and yet still getting wave after wave of cash from investors. [1]: https://techcrunch.com/2023/08/01/uber-reports-first-quarterly-operating-profit/ https://techcrunch.com/2023/08/01/uber-reports-first-quarter...
  - lotsofpulp 3y ago
    https://www.crunchbase.com/organization/uber/company_financials https://www.crunchbase.com/organization/uber/company_financi... >Their latest funding was raised on Sep 14, 2020 from a Post-IPO Debt round. I would not even count that since "getting wave after wave of cash from investors" usually means receiving cash in exchange for equity, not borrowing money. It seems the most recent cash they received from investors was at IPO in May 2019, and before that, Softbank in Jan 2018: https://www.investopedia.com/articles/personal-finance/111015/story-uber.asp https://www.investopedia.com/articles/personal-finance/11101...
    - cableshaft 3y ago
      Your own link shows that they've had 32 funding rounds. I'm sure they've had an increasingly smaller burn rate in recent years, as they've gotten closer and closer to profitability, and thus required less cash less often (also if the funding round is large enough, they'd need to do it less often), but I'd consider 32 funding rounds wave after wave of cash from investors to me. That's even more rounds than I assumed, that's more than 2 each year on average.
- kipchak 3y ago
  Growth businesses like tech and startups also tend to be more sensitive to rate increases due to changes in the time value of money. At 0% rates a business that generates a return in 10 years is fairly close to the same as a business that generates a return in 1 year, but at 5% rates the math is very different.
bluefirebrand 3y ago
How many of these businesses even existed 20 years ago? Or even 15 or 10?

Sure, but most businesses at least try to be profitable, whereas many in tech were fundamentally untenable without a constant injection of external capital to prop up a venture aiming only to grow rather than to actually be sustainable.

cableshaft 3y ago
Still blows my mind that Uber's first reported quarterly earnings that showed a profit in its entire history was Q2 2023[1]. And the company was founded in 2009. They've been losing money for well over a decade and yet still getting wave after wave of cash from investors. [1]: https://techcrunch.com/2023/08/01/uber-reports-first-quarterly-operating-profit/ https://techcrunch.com/2023/08/01/uber-reports-first-quarter...
- lotsofpulp 3y ago
  https://www.crunchbase.com/organization/uber/company_financials https://www.crunchbase.com/organization/uber/company_financi... >Their latest funding was raised on Sep 14, 2020 from a Post-IPO Debt round. I would not even count that since "getting wave after wave of cash from investors" usually means receiving cash in exchange for equity, not borrowing money. It seems the most recent cash they received from investors was at IPO in May 2019, and before that, Softbank in Jan 2018: https://www.investopedia.com/articles/personal-finance/111015/story-uber.asp https://www.investopedia.com/articles/personal-finance/11101...
  - cableshaft 3y ago
    Your own link shows that they've had 32 funding rounds. I'm sure they've had an increasingly smaller burn rate in recent years, as they've gotten closer and closer to profitability, and thus required less cash less often (also if the funding round is large enough, they'd need to do it less often), but I'd consider 32 funding rounds wave after wave of cash from investors to me. That's even more rounds than I assumed, that's more than 2 each year on average.
kipchak 3y ago
Growth businesses like tech and startups also tend to be more sensitive to rate increases due to changes in the time value of money. At 0% rates a business that generates a return in 10 years is fairly close to the same as a business that generates a return in 1 year, but at 5% rates the math is very different.

bluefirebrand 3y ago

How many of these businesses even existed 20 years ago? Or even 15 or 10?