[Spivak]

How does that work with other kinds of investments like loans? You don't "save up" to open a restaurant, you put together a business plan and go to a bank. VCs are just doing that but willing to take on riskier businesses in exchange for equity instead of interest payments.

[thfuran]

I suspect you'll find few restaurants opening up with the intention of opening as many locations as possible as quickly as they can be built, all providing food at under cost for years on end until the local restaurant scene is sufficiently disrupted that McDonalds buys them to make them go away.

[Spivak]

I mean you're essentially describing DoorDash + competitors and HelloFresh + competitors. But in the restaurant industry proper it's the same thing except your exit isn't to get bought by McDonalds but to secretly dominate the mid-high tier dining scene in a given area and collect all the profits. So they won't build a bunch of the same restaurants but will take on massive debt to buy everything in a trendy area. I didn't really expect that in 2018ish that there would be a pivot from these companies to a real-estate play so they don't even have to own the restaurants anymore but can force them to use the company payment system and suppliers but it makes total sense in a boring dystopia way.

"Support Local Restaurants! (being puppeted by a massive hybrid restaurant/real-estate conglomerate)"