Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery. Annual income twenty pounds, annual expenditure three hundred million pounds, result unicorn.
http://link.mail.bloombergbusiness.com/join/4wm/moneystuff-s...
(no affiliation, just a Matt Levine fan)
https://www.bloomberg.com/opinion/articles/2015-02-27/arbitr...
https://en.wikipedia.org/wiki/Max-Herv%C3%A9_George
>>By 2015, up to 50 court decisions had been rendered against Aviva France. In September 2014, the French Supreme court, the Cour de Cassation, ruled in favor of the George family, determining that the life insurance contracts, as drafted with the "known price" clause, are legally binding under French law.[18] Nevertheless, George is still in court against Aviva, having won on the principle of the legality of the contracts, he now needs to have his prejudice recognized and valued in a second ongoing battle.<<
If you're a techie and want to understand the financial world (particularly big VC and public equities), I highly recommend reading him daily. He breaks super complex things and makes them very easy to read...and SUPER entertaining.
It feels like finance writing is usually split between content for the general public (understandable, but often vitriolic and devoid of context) and writing for finance types (jargon-filled and usually devoid of ethical considerations). Levine straddles the line beautifully; he uses lay terms to explain the realities of financial instruments, not just silly metaphors, and looks at what should exist in the context of modern finance rather than gut instinct.
https://dickensroundtheclock.wordpress.com/2015/03/11/in-sho...
Big companies like Facebook will pay cash or valuable equity to take those engaged users off your hands in an acquisition.
Growth potential and demand elasticity are both hard to predict, so VCs are betting on high growth and trusting that one high-demand win can pay off 100 or 1,000 losses. (The people chasing proven revenue with unknown growth potential are banks, investing in things like expanding existing stores.) Did MoviePass show a <1% chance of succeeding? Probably. <0.1%? I'm not so sure.
As for founders... Often, they're gamblers or extremely self-confident. Less generously, the field attracts a lot of people who are happy to burn someone else's money on a ridiculous narrative, while their actual focus is on getting acquired or elevating their personal reputation. (And heck, there are VCs doing this too. Consistently returning 25% on your fund is nice, but funding Snapchat will get you a job at a fancy Sandhill office, and funding Facebook will get you treated as a rainmaker and even a political player.)
Oh, I get it, they sell antidepressants for the society they ruined.
It could be like the list of folks who buy stuff on late-night infomercials.
VC exit strategy: sell stock, get list and bail.
I've been to so, so many startup / entrepreneurship conferences / competitions / workshops and what not the past years, where the main takeaway has been: "Growth is everything, business models can be reshaped later on".
I mean, sure, it's all fun and games for the startups and consumers - they're being bankrolled and subsidized by VC money, but it's a very artificial state. Lots of products start to suck the moment monetization enters the picture.
The trick is holding out long enough to get there, and I think they severely underestimated the general public's free time.