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I worked for 4 startups that were operating for years at a loss with revenue, all are profitable today and all were acquired. My current startup is also not pr

by inglor 1y ago

I worked for 4 startups that were operating for years at a loss with revenue, all are profitable today and all were acquired. My current startup is also not profitable, we're burning money but we're already signing big contracts and I hope in a year or two we keep growing rather than become profitable (1B+ valuation in a year). Becoming profitable, even at this point is just a matter of deciding to stop expanding - but neither us nor our investors want this given there is so much potential for growth and more revenue streams on the line. this is ycombinator's news aggregators, I suspect you're not going to get a "don't take risks and build things" vibe - it's a startup accelerator after all :).

troupo 1y ago
> all are profitable today and all were acquired. They are either profitable or acquired :) > Becoming profitable, even at this point is just a matter of deciding to stop expanding Yeah, growth at all costs is one of the defining factors. > it's a startup accelerator after al The only business models for Y Combinator startups are: - run indefinitely long on unlimited investor money - get sold to the highest bidder at some nebulous market valuation Becoming profitable never enters the picture :)
- sebastiennight 1y ago
  > They are either profitable or acquired :) Why? Once a company has been acquired, does it automatically fall out of profitability? If it's acquired in a stock sale, it remains an independent entity and still has a P&L If it's acquired/merged in an asset sale (not usually a good sign), it can still be assessed whether the new division is profitable - except in some rare cases like Google (allegedly!) not wanting to itemize some of their divisions to avoid too much regulatory scrutiny on monopoly positions. > Becoming profitable never enters the picture :) Seems very wrong based on looking at YC's portfolio, which apparently includes a bunch of profitable startups
  - troupo 1y ago
    > Once a company has been acquired, does it automatically fall out of profitability? It becomes a part of the company that bought it? > Seems very wrong based on looking at YC's portfolio, which apparently includes a bunch of profitable startups It contains very few profitable startups. Those are the exceptions.
    - sebastiennight 1y ago
      > It becomes a part of the company that bought it? Not necessarily. As I explained above, most successful acquisitions are stock sales, in which case the acquiring company now owns the startup (they hold the shares). The startup is still a separate entity at this point. Google is known for just merging the acquired startups into their product line (and/or killing them), but it's not a hard rule that all acquisitions are mergers. For example, AFAIK Livestream is still a subsidiary of Vimeo (ie wholly owned, but separate): https://en.wikipedia.org/wiki/Vimeo_Livestream https://en.wikipedia.org/wiki/Vimeo_Livestream So Livestream can be profitable or not, separately from whether its acquirer is.

by inglor 1y ago

troupo 1y ago

> all are profitable today and all were acquired. They are either profitable or acquired :) > Becoming profitable, even at this point is just a matter of deciding to stop expanding Yeah, growth at all costs is one of the defining factors. > it's a startup accelerator after al The only business models for Y Combinator startups are: - run indefinitely long on unlimited investor money - get sold to the highest bidder at some nebulous market valuation Becoming profitable never enters the picture :)

sebastiennight 1y ago
> They are either profitable or acquired :) Why? Once a company has been acquired, does it automatically fall out of profitability? If it's acquired in a stock sale, it remains an independent entity and still has a P&L If it's acquired/merged in an asset sale (not usually a good sign), it can still be assessed whether the new division is profitable - except in some rare cases like Google (allegedly!) not wanting to itemize some of their divisions to avoid too much regulatory scrutiny on monopoly positions. > Becoming profitable never enters the picture :) Seems very wrong based on looking at YC's portfolio, which apparently includes a bunch of profitable startups
- troupo 1y ago
  > Once a company has been acquired, does it automatically fall out of profitability? It becomes a part of the company that bought it? > Seems very wrong based on looking at YC's portfolio, which apparently includes a bunch of profitable startups It contains very few profitable startups. Those are the exceptions.
  - sebastiennight 1y ago
    > It becomes a part of the company that bought it? Not necessarily. As I explained above, most successful acquisitions are stock sales, in which case the acquiring company now owns the startup (they hold the shares). The startup is still a separate entity at this point. Google is known for just merging the acquired startups into their product line (and/or killing them), but it's not a hard rule that all acquisitions are mergers. For example, AFAIK Livestream is still a subsidiary of Vimeo (ie wholly owned, but separate): https://en.wikipedia.org/wiki/Vimeo_Livestream https://en.wikipedia.org/wiki/Vimeo_Livestream So Livestream can be profitable or not, separately from whether its acquirer is.