From my understanding, these companies have identified sales tactics that work, and marketing tactics that work, so I'd imagine some of the money would go towards supercharging their sales team's and marketing teams etc... but still, 400 million? Why so much? How do they spend it?
I've seen huge 'boiler room' setups at companies of this nature, with rows upon rows of support representatives in one big room.
I don't see why not. This looks like an important business opportunity.
After a company gets a large amount of funding, suddenly time is more scarce than money.
You need project X to succeed in the next month, and that might mean putting 2 to 3 vendors on the problem and picking the best result. Yes this is more expensive, but we're now optimising for time
Another strategy is acquisition of technology and talent, if you have 400 million in funding, then it makes sense economically to purchase a infrastructure team of tech company at 10 million, when you know it's going to generate 100M in value for you.
The best companies are ones where strategy is fluid and willing to adopt to the reality of dynamic resource scarcity.
When companies raise a pile of money, they hire a bunch of managers, consultants, etc. Then they need executive offices, expense accounts, etc.
- The kind of people that expand their product line instead of focusing of the 20% that generates 80% of profits
- The kind of people that would buy Starbucks daily even if they lived paycheck to paycheck.