Comment by euroclydon | Hacker News Reader

Comment by euroclydon | Hacker News Reader

My understanding is that there's really no point in a funded startup being profitable. The whole idea is to take in outside money and grow. So, profitable startups are either not very robustly funded (think lean or unfunded) or no longer startups.

Now I have a strange interest in startups and companies who are hiring. I love to see how talented and hardworking people are choosing to engage the market. I actually almost wouldn't mind being a technically competent stealth recruiter.

The late couple of times there's been a "Who'd hiring" thread on HN, I've posted a gig on CL trying to find someone to organize the companies for me in a spreadsheet by location and industry, not because I intend to take any action with it, but simple so I can absorb the information at a glance.

This is not quite true. There is still reason to take funding when a startup is profitable, and it happens all the time. Off the top of my head:

1) Not making enough money to scale according to future demand

2) Want to move into country which is usually costly

3) Strategic investor that the money is nice, but really the deal is done to get the connection

4) Want to enter a new industry or release a new product

5) Want to acquire some some technology (could be a company, product, patents, etc...)

6) Fear of a larger company moving in and attempting to take out the startup

7) Profits are simply not enough to to sustain growth that would allow you to make multiples of current profits

8) Legal troubles in the near future that are believed by the investors and CEO to survivable

One thing to remember to think about while job seeking is that you likely will make less money off an exit if you join a company that is breaking even or making a profit. The people most rewarded are those that took it from non-profitable to profitable.

Thanks. I guess it becomes nuanced from an accounting perspective pretty quickly, but it would seem that if you spend the injected cash and don't make it back within a given time frame, then you are no longer profitable.

Cash flow != profitability

:)

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