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The groping and stuff is of course unacceptable. But I don't understand what they need an investor for if there is 60% MoM growth from $25k/mo? Why give a lar

• deleted 11y ago
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• solve 11y ago
  If you ask the "why do they need investors if they already have enough revenue at the moment to survive for now" question, then you really don't understand the basics of startup investment. The situation where you obviously need investment just to survive, is the only time you absolutely don't try to raise investor money. Sorry, but this question comes up far too often on HN.
• pja 11y ago
  Because it eliminates uncertainty? To sustain that 60% MoM growth rate, you’re going to have to recruit staff to match (this is a relatively high-touch company by the sounds of things - no scaling out your staff to millions of users each!) What happens if growth stalls for a few months just after you recruit a bunch of new staff? Oops, cash crunch: you fail to make payroll & the company goes bankrupt. On the other hand, if you play it safe & employ the minimum number of staff to make payroll even under conservative MoM growth predictions, you risk poor service killing your word of mouth under an influx of new users. Either of these outcomes could bite you at any point: if you’re re-investing your income straight back into the company in order to get the maximum growth rates then your exposure to short term user volatility is very high.