[rudasn]

> Amazon lost 3 billion before it became profitable

Where exactly did they find 3 billion to lose? How did Jeff Bezos manage to convince investors to give up so much cash? I'm really surprised about this

[larrys]

Taking only 1 year as an example, 2001 Amazon had $444 million of accounts payable, $305 million of current liabilities (some other things...) and 2.1 billion of long term debt.

So, in 2001 the total current liabilities and ltd was over 3 billion dollars.

So they borrowed - they issued bonds as well as used other types financing. The interest payments for that year are actually pretty low in relation to the debt, interest expense for 2001 was only about 139 million.

[larrys]

"How did Jeff Bezos manage to convince investors"

With people investors or not

a) consistency principle - people not wanting to be proven wrong (so they will throw good money after bad)

b) sure failure if they don't give more money so they take a chance and throw good money after bad.

c) people issuing the debt make money on the deal so they have incentive to push and not as much if a failure.