First I was suggesting that the money printing machine you allude to will sooner or later get too big to support its weight, at which point you'll be left with a bunch of dimes (or rather, companies that need to raise more to live but can't).
I also suggested that the popular narrative of "raise a huge round because money is cheap" is misleading and founders in these large rounds are actually giving up large amounts of control. That's more a general, purely anecdotal observation.
My point re: buying revenue but not profits... I think I'm more saying "More money will not make your business more profitable. But it can help book sales." If your metrics all work and you really are a profitable business already, that may be be made more scalable by more money. But if you're unprofitable, even accounting for "growth mode", more money isn't going to improve that by itself. My personal opinion is that many companies are showing impressive revenue growth but glossing over core profitability, and these companies will have a tough time fixing that.
> "raise a huge round because money is cheap" is misleading and founders in these large rounds are actually giving up large amounts of control.
When the money is cheap it means they aren't giving up control relative to when money is expensive. There is a phenomenon in tech VC right now, which is the money is beholden to the tech talent and not the other way around. That's not usually the case, historically speaking. Not to mention, some of these rounds are liquidity events for founders who are looking to cash out personally (i.e. look at Groupon's $800m IPO raise and follow the money).
> My personal opinion is that many companies are showing impressive revenue growth but glossing over core profitability, and these companies will have a tough time fixing that.
I see what you're saying, but don't think it's necessarily true. Branding and network effects are real things. That's why finance is loving tech right now...if you can buy your land grab and then created a castle with a moat over a 5-10 year time period, there are some serious rewards of establishing a new brand with longevity at relatively low risk.
There's going to be a time (soon) where profitability does matter, it's just not now.
First I was suggesting that the money printing machine you allude to will sooner or later get too big to support its weight, at which point you'll be left with a bunch of dimes (or rather, companies that need to raise more to live but can't).
I also suggested that the popular narrative of "raise a huge round because money is cheap" is misleading and founders in these large rounds are actually giving up large amounts of control. That's more a general, purely anecdotal observation.
My point re: buying revenue but not profits... I think I'm more saying "More money will not make your business more profitable. But it can help book sales." If your metrics all work and you really are a profitable business already, that may be be made more scalable by more money. But if you're unprofitable, even accounting for "growth mode", more money isn't going to improve that by itself. My personal opinion is that many companies are showing impressive revenue growth but glossing over core profitability, and these companies will have a tough time fixing that.