[mbreese]

> VC subsidies are usually about hiding the true market value of a product to attract customers

A more benevolent reading of this is that the VC money is used to make the product more affordable at small scale. Many times products become cheaper/affordable at larger scales. Young companies use the VC $$ help to get them across that inflection point.

This logic breaks down when the product cost doesn’t get lower with more scale. Customer service oriented companies usually fall in this category.

[ljw1001]

A less benevolent take is that VC money is primarily used to buy market share by selling below cost until other competitors exit and the company is left with a monopoly.