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Comment by beoba | Hacker News Reader

Using that math, I've already 'earned' many millions in my lifetime, even though I've only been out of college for a couple years.

And that number gets even more exaggerated if I choose to base the calculation off a month where I got a bonus.

My point stands; it's fabricated revenue.

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It's a well understood and useful concept. Let's say you work at a job making $120K. Then in November, you start a new job paying $180K. Would you think that you make $130K (the amount you actually earned that year) or $180K (the amount you expect to make going forward)? Is the extra $50K fabricated salary?

How else would you communicate fast growth in revenue? Also, since run rate is well understood, people don't use it for exceptional or one-time events like a bonus. For example, Groupon didn't claim to be raising money at $12B/yr since the big raise was a one-time event.

It doesn't communicate growth -- there is nothing to compare against. If you were going to do that, you'd simply provide a something like YOY% change in revenue.

A run rate is just inflating/fabricating PAST revenue by speculating on the FUTURE. Refer to my helpful chart:

  |  / <- SHOW THIS NUMBER TO INVESTORS, PRETEND IT WILL GO ON FOREVER
  | /
  |/   <- HIDE THIS NUMBER, TOO LOW
  +---

Wow, a handy ASCII chart that disproves the entire concept of investment. Congrats!

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