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Most VC backed private companies aren’t profitable. If it is a public company the information is readily available

deleted 2y ago
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lesuorac 2y ago
There's still a question of what you consider profitable. A company may make more in revenue than strictly expenses but stock-based compensation is often not considered an expense so if you add those into the expense side it could change profitability.
- scarface_74 2y ago
  But honestly, profitability doesn’t matter. All of the major tech companies were profitable and still had tens of thousands of layoffs between them.
  - mlinhares 2y ago
    Layoffs in big tech are mostly to place workers in their place and shake the market, they've definitely been able to drive down salaries these past two years.
    - grajaganDev 2y ago
      Yes - I think layoffs are also backlash against WFH. Employees were getting a bit too uppity.
- ibejoeb 2y ago
  Stock-based compensation is absolutely considered an expense under US GAAP.
  - lesuorac 2y ago
    Which is why companies report non-GAAP numbers. https://abc.xyz/assets/71/a5/78197a7540c987f13d247728a371/2024q3-alphabet-earnings-release.pdf https://abc.xyz/assets/71/a5/78197a7540c987f13d247728a371/20... > We provide non-GAAP free cash flow because it is a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that can be used for strategic opportunities, including investing in our business and acquisitions, and to strengthen our balance sheet.
- deleted 2y ago
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OJFord 2y ago
Sure, and then there's all the private companies backed by non-venture capital, and the profitable ones running on revenue.
- scarface_74 2y ago
  You don’t find too many profitable “lifestyle companies” in tech.
  - mattgreenrocks 2y ago
    You stated that there aren't many profitable lifestyle companies. And the insinuation put forth is that they are very rare to the point of almost nonexistent. This comes off as rather reductionist and absolute to me; tech is a massive industry, do you know every sector within and adjacent to tech to have reached this conclusion?
    - scarface_74 2y ago
      No. But I do know statistics. The largest employees in tech are the public companies that we have all heard of. The next largest segment are VC funded companies with the smallest segment by far being the “lifestyle companies”. Do an exercise, go to any job board and put in filters to match the types of jobs you are qualified for. How many of those do you think are going to be profitable, private, lifestyle companies?
      - tomnipotent 2y ago
        I would put money on all of big tech and all public companies combined not employing more than 30% of professional programmers. At least in the US only 15% work at a large company (500+).
  - alistairSH 2y ago
    There are plenty of mid-size tech companies that are both not-public and not-lifestyle. My employer is one of them. Several thousand employees, global reach, and owned by PE (Blackstone and Vista).

deleted 2y ago

[deleted]

There's still a question of what you consider profitable. A company may make more in revenue than strictly expenses but stock-based compensation is often not considered an expense so if you add those into the expense side it could change profitability.

scarface_74 2y ago
But honestly, profitability doesn’t matter. All of the major tech companies were profitable and still had tens of thousands of layoffs between them.
- mlinhares 2y ago
  Layoffs in big tech are mostly to place workers in their place and shake the market, they've definitely been able to drive down salaries these past two years.
  - grajaganDev 2y ago
    Yes - I think layoffs are also backlash against WFH. Employees were getting a bit too uppity.
ibejoeb 2y ago
Stock-based compensation is absolutely considered an expense under US GAAP.
- lesuorac 2y ago
  Which is why companies report non-GAAP numbers. https://abc.xyz/assets/71/a5/78197a7540c987f13d247728a371/2024q3-alphabet-earnings-release.pdf https://abc.xyz/assets/71/a5/78197a7540c987f13d247728a371/20... > We provide non-GAAP free cash flow because it is a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that can be used for strategic opportunities, including investing in our business and acquisitions, and to strengthen our balance sheet.
deleted 2y ago
[deleted]

OJFord 2y ago

Sure, and then there's all the private companies backed by non-venture capital, and the profitable ones running on revenue.

scarface_74 2y ago
You don’t find too many profitable “lifestyle companies” in tech.
- mattgreenrocks 2y ago
  You stated that there aren't many profitable lifestyle companies. And the insinuation put forth is that they are very rare to the point of almost nonexistent. This comes off as rather reductionist and absolute to me; tech is a massive industry, do you know every sector within and adjacent to tech to have reached this conclusion?
  - scarface_74 2y ago
    No. But I do know statistics. The largest employees in tech are the public companies that we have all heard of. The next largest segment are VC funded companies with the smallest segment by far being the “lifestyle companies”. Do an exercise, go to any job board and put in filters to match the types of jobs you are qualified for. How many of those do you think are going to be profitable, private, lifestyle companies?
    - tomnipotent 2y ago
      I would put money on all of big tech and all public companies combined not employing more than 30% of professional programmers. At least in the US only 15% work at a large company (500+).
- alistairSH 2y ago
  There are plenty of mid-size tech companies that are both not-public and not-lifestyle. My employer is one of them. Several thousand employees, global reach, and owned by PE (Blackstone and Vista).