Startups which were loosing hundreds of millions last year are now annocuing PAT and planning for IPOs. What has changed really or were they uselessly burning money
Law of diminishing marginal returns would be the answer here. Companies CAC was greater than LTV and they were spending money because they had to show top line growth to get the money. Now with focus on profitability, companies have done 3 main things-
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Wrong accounting. Hidden org structures showing one part of the company in profit and others in more losses.
1 year back all startups were losing money like crazy while all of a sudden everyone from Swiggy to Meesho to Unacademy are profitable or EBITDA positive. Other companies which were profitable earlier have not shown a spike in profit.
W...
Just an intersting data point. There are about 400 odd startups who raised at least 50m since 2010. Less than 20% are profitable.
Most of the startups are in loss and have no clue whether they would be able to make it to IPO, I've always been wondering how come so they get the funding in hundreds of millions?
Even though the early investors seek to make money off ...
2022 has been the year of ESOP value destruction. Lets collect some real instances here. This silent but deadly phenomenon is hardly reported in mainstream media.
