Re:Don't Take VC Funding – It Will Destroy Your Company
by runlaszlorun on Sunday July 09, 2023 @11:48AM
(#36655476)
Yikes. I knew they’ve hemorrhaged money but I didn’t know it was that much. I ran the numbers once back when their total funding a lot less. And I came to the conclusion that with that money they could have literally paid every cab driver’s salary for a year and given out free rides. But since you need regulators to look the other way, there was enough to literally give every state legislator in every single state a million dollars. And I’m sure it’d take far less. And there was still a sizable chunk left over.
I feel like the startup game for a while now has been… and the numbers are arbitrary but I don’t think the dynamic is wrong… raise about $100 million to get a total of $10m in revenue and then be worth $1b. That’s not business as we think of it.
As of right now, the single greatest example in modern business history is Uber. Although they continue to trim their operating losses and it appears they may reach sustainability ($14.1b revenue with $8.5b operating loss in 2019; trimmed to a $1.8b operating loss on $31b in revenue the past four quarters). Their history of loss generation is astounding. Upwards of $30 billion in operating losses since 2009. Even in an ideal scenario it'll probably take them 10+ years after they finally reach an operating profit to turn that net positive.