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That may not matter -- in fact, most companies that take on VC money are not profitable for quite awhile, with the expectation that in the long term, the busine
by endlessvoid94 13y ago
That may not matter -- in fact, most companies that take on VC money are not profitable for quite awhile, with the expectation that in the long term, the business will be enormous.
Before making the judgement that "psh, they're not profitable", be sure the vectors look right. For example, have they been making that margin smaller and smaller, and is the revenue getting larger and larger? If so, then they're fine in the long term, and it's a sound investment.
- photorized 13y agoWe don't have any insight into their financials as far as margins etc. We do know they had raised $188MM, and had purchased 3 companies (according to CB anyway). My personal take on this, after looking at their funding history briefly - had their margins been getting smaller, they wouldn't have had to continue raising round after round. I don't get the fascination with subsidized revenue growth - almost anyone can do that with massive infusions of cash.
- endlessvoid94 13y agoI don't think there's a fascination, I just think that's where most VCs invest their money, and it can be a compelling investment for acquisitions. The larger issue is that short term profitability is not the only thing to look at. It should certainly be one thing to consider, but there are lots of examples of companies that became enormous after a long period of unprofitability. And since ET has so much revenue and only 7% loss compared to that revenue, I can totally see how this would be a good investment for Salesforce.