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What? The underlying assumption is that, even VC backed companies, can cover their costs with their revenue. It is just a matter of order. When you have capita
by tossandthrow 1y ago
What? The underlying assumption is that, even VC backed companies, can cover their costs with their revenue.
It is just a matter of order. When you have capital heavy enterprises, you usually have your costs before you have your revenue.
- scarface_74 1y agoThe purpose of VC funding is not to reach profitability. It’s the reach an “exit” - usually via an acquisition or occasionally via an IPO. But out of the literally thousands of companies that YC has funded, only about a dozen have gone public and out of those, if you had invested equally when they IPOd, you would have lost about 50% of your investment. https://medium.com/@kazeemibrahim18/the-post-ipo-performance-of-y-combinator-companies-a-mixed-bag-of-success-and-struggle-58e9a4006f01 https://medium.com/@kazeemibrahim18/the-post-ipo-performance... A “success” for a VC company is not a company that ends up being a lifestyle business that muddles along.