I'm sick of a different kind of BS. Generally speaking, creating startups has become almost as "meaningless" as trading stocks. You used to buy a stock because you believed in the long-term value of the company. Now you buy a stock because people panic on that given day and you feel you can take brief ownership of it to squeeze a few pennies out of it, before dumping it back on the market.
Why do VCs love startups? Because you can create value where there is none. Somehow 1,000,000 users capable of generating $200,000 in ad revenue per year (never mind the startup is burning 2 million a year!) are able to create valuations of $50 million. But hey, hot investors X, Y, and Z are in on this deal so it must be good! And thus the creation of companies no one gives two shits about continues.
How many startups are actually profitable - that is, genuinely creating more cash than they are burning? I think I can count them on one hand.
> How many startups are actually profitable - that is, genuinely creating more cash than they are burning? I think I can count them on one hand.
Surprisingly less true than you might think. I am friends with many founders that are cash flow positive!
Also, I haven't yet seen many of these crazy valuations. I mean, I see a few in TechCrunch every now and then, but the consistency of the valuations I'm seeing seems to be rare compared to others' experiences.
Why do VCs love startups? Because you can create value where there is none. Somehow 1,000,000 users capable of generating $200,000 in ad revenue per year (never mind the startup is burning 2 million a year!) are able to create valuations of $50 million. But hey, hot investors X, Y, and Z are in on this deal so it must be good! And thus the creation of companies no one gives two shits about continues.
How many startups are actually profitable - that is, genuinely creating more cash than they are burning? I think I can count them on one hand.