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It does not seem appropriate to me for founders of a not-profitable company to take out $1M in cash.
by lauradhamilton 13y ago
It does not seem appropriate to me for founders of a not-profitable company to take out $1M in cash.
- jaxytee 13y agoThat's because your not a sociopath.
- argonaut 13y agoProfitability/revenue are not the only metrics that matter to investors. Remember that in order to take out $1M in cash you have to find investors who are willing to pay you $1M for your shares. To investors, metrics like user growth, retention, and engagement also matter (see: Snapchat). I'm not making any claims as to whether those investors are being smart or foolish.
- amit_m 13y agoAmazon is, to a close approximation, not profitable. Would you say it is unreasonable for its founders to take large paychecks? Source: See second chart on http://www.mondaynote.com/2012/05/27/decoding-share-prices-amazon-apple-and-facebook/ http://www.mondaynote.com/2012/05/27/decoding-share-prices-a...
- jtheory 13y agoThat seems like a poor example -- from what I've read (and vaguely remember) their revenue is huge (and they could easily be extremely profitable if they so chose) but they're choosing to keep re-investing all of their revenue into expansion, people, tech, etc..
- gaadd33 13y agoEven if its a requirement of the VC's so that the cap table works out to what they want? i.e. the VC's want 60% of the company at a specific valuation but they can't do that without the founder selling 5% to them.