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Comment by scarface74 | Hacker News Reader

I wouldn’t start one company. I would take a leaf out of Y Combinator’s book, and start funding lots a small startups, as well as advising them

There are only two YC companies that have gone public and both of those are still losing money -- PagerDuty and Dropbox and as far as I know, none have reached profitability.

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Profitability=tax

Are you really saying that these companies are losing money so they don't have to pay taxes?

Yes most companies do that on the books, including movie productions, Amazon, etc. It’s not because their business model still doesn’t work, it’s because the point of corporate income tax is to make sure the corporation doesn’t hoard money and instead reinjects it into business expenses such as payroll.

I realize that, but the companies I’m referring to - the VC backend companies and the YC backed public companies aren’t cash flow positive.

Yes but my point is that if they're reporting profits it'd mean they'd have run out of things to spend money on (R&D, employees, product dev, etc). The whole point of VC funding is that so much money will go towards product dev that they'd need external funding.

And how does that apply to a public tech companies that are still losing money like PagerDuty, Dropbox, Mongo, and ElasticCo?

They have the same obligation to shareholders to increase future profits, not to hoard cash, which is what income tax discourages.

I would call income tax a good problem to have, one which these companies don't have

A company like Dropbox does not need to keep its headcount to maintain their current product and extract profits (of which they lose a big chunk to corporate income tax). If they wanted to show profit they can easily tighten, focus, and get rid of R&D and new product development.

They aren’t cash flow positive. No company chooses not to be cash flow positive to avoid taxes. That’s not how things work. Do you feel the same way about Uber and Tesla? Do you think they aren’t showing a profit to avoid taxes or because they still haven’t figured out how to sell their products at a cost that will cover fixed and variable costs?

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