As venture capitalists became more discerning, investment in U.S. tech startups plummeted by 30% in 2016 from a year earlier.
But: Investment in 2016 is still higher than any year from 2002-2013.
“There are companies that everybody wants to invest in and there are a large set of companies that almost nobody wants to invest in,” said venture capitalist Keith Rabois of Khosla Ventures.
But: isn't this always the case?
“There’s going to be a shakeout” for companies that can’t show a profit, said James Beriker, the chief executive of meal-delivery service Munchery.
Well, eventually a business needs to show revenue and a path to profit. Otherwise the music stops and the equity has no value.
Beepi guaranteed sellers a price, and if it couldn’t find a buyer in 30 days, it purchased the car. Beepi marked up the price and pocketed the difference.
Beepi was whipsawed by cars that sat unsold for a month, and that Beepi therefore had to purchase. Losses on those cars could reach more than $5,000 per high-end car, former employees said.
For all the posters admonishing Beepi for spending so much money so fast: this looks like a legitimately capital intensive business. It also looks like it has unlimited exposure to high expenses related to immobile inventory.