4 ms·
A big buyout is equivalent to turning a profit, since the buyer will expect to profit from their purchase.
by QuantumChaos 12y ago
A big buyout is equivalent to turning a profit, since the buyer will expect to profit from their purchase.
- Klinky 12y agoNo it's not. A company being profitable is different than a company turning a profit specifically for it's initial investors. The profitability of a company post-buyout is murky. We're also talking about VCs getting in on profitable businesses ventures, not tech conglomerates. If a VC makes their money by finding hot trending startups that later get bought out, they're not really investing in a company that profits on the merits of the business plan alone. A lot of the big buyouts are based on buzz, and often the valuations are overblown when compared to actual ability to profit. Expected profits != actual profits.