[jcnnghm]

Many businesses aren't funded by banks. They're bootstrapped the entire way. It's not uncommon for a business to lose money for the first few years, it's actually the norm. According to the US SBA, 50% of new businesses fail in the first 5 years.

[vitovito]

That's a misleading statistic because the IRS only allows you claim deductions on a money-losing primary income generator for the first five years.

After that, it's reclassified as a hobby, and you can't deduct for it any more, so businesses either suddenly start submitting tax returns that show they're breaking even or profitable, or they stop submitting them altogether (have "closed" or "failed").