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Uber, Dropbox, AirBnB, Slack, Pinterest.

Long term un-profitable venture backed software companies are practically a cliche at this point.



Uber is special, but the rest of the companies you named there were at one point rather early in their lifecycle profitable, no?

AirBnB for sure. Pretty sure Dropbox and Slack were in the black for awhile. Please feel free to educate me about Pinterest, I have no idea.

But personally, I think the idea of companies designed to corner a market and then get acquired are just a different kind of medium term investment strategy. For every unicorn you see, there are hundreds of failures where the plug got pulled and information got fed forward to preferential incarnations of the venture.


They are not long term unprofitable for the VCs. Those companies have been through rounds and rounds of growth which has brought in other investors (i.e. who VCs can sell to if they desire).

What about the company that would need to labour for 5 years before they get the MVP out the door?


They are profitable to VCs exactly because system for long-term thinking works, it just consists of different levels of investors, with different risk/reward goals, handing over the same company, still long-term, still unprofitable, one to another. VCs are just one of the first levels of this system.


What about the company that would need to labour for 5 years before they get the MVP out the door?

Magic Leap.


Why is 5 years the cutoff?




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