And for over a decade most companies talk only about revenue, which is infuriating. Because most startups and tech darlings survive only by continuous infusion of unlimited investor money.
I worked for 4 startups that were operating for years at a loss with revenue, all are profitable today and all were acquired.
My current startup is also not profitable, we're burning money but we're already signing big contracts and I hope in a year or two we keep growing rather than become profitable (1B+ valuation in a year).
Becoming profitable, even at this point is just a matter of deciding to stop expanding - but neither us nor our investors want this given there is so much potential for growth and more revenue streams on the line.
this is ycombinator's news aggregators, I suspect you're not going to get a "don't take risks and build things" vibe - it's a startup accelerator after all :).
Why? Once a company has been acquired, does it automatically fall out of profitability?
If it's acquired in a stock sale, it remains an independent entity and still has a P&L
If it's acquired/merged in an asset sale (not usually a good sign), it can still be assessed whether the new division is profitable - except in some rare cases like Google (allegedly!) not wanting to itemize some of their divisions to avoid too much regulatory scrutiny on monopoly positions.
> Becoming profitable never enters the picture :)
Seems very wrong based on looking at YC's portfolio, which apparently includes a bunch of profitable startups
> It becomes a part of the company that bought it?
Not necessarily. As I explained above, most successful acquisitions are stock sales, in which case the acquiring company now owns the startup (they hold the shares). The startup is still a separate entity at this point.
Google is known for just merging the acquired startups into their product line (and/or killing them), but it's not a hard rule that all acquisitions are mergers.
The bets are invariably: sell to the highest bidder, exit through inflated IPO and/or speculative "market capitalization".
There are a few outliers like "let's subsidize this price dumping until all competitors are dead and then we recoup money by being a de facto monopoly"
My current startup is also not profitable, we're burning money but we're already signing big contracts and I hope in a year or two we keep growing rather than become profitable (1B+ valuation in a year).
Becoming profitable, even at this point is just a matter of deciding to stop expanding - but neither us nor our investors want this given there is so much potential for growth and more revenue streams on the line.
this is ycombinator's news aggregators, I suspect you're not going to get a "don't take risks and build things" vibe - it's a startup accelerator after all :).