this post was submitted on 09 Jun 2023
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Thank you for the explanation, I'm having a hard time understanding how an "unprofitable" business has managed to stay afloat this long.
Through investors, who consider the revenue a good indication for future profits. So they float the bill and receive shares in the company instead, and cash out during the IPO.
Investors will give cash in exchange for equity in the company. The cash is used to fund whatever expenses aren't covered by revenue. Those investors are going to expect profitability to come eventually. Sometimes the business winds up doing some stuff that damages their product in order to achieve profitability.