Why Investors WANT Startups to Lose Money

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  • Опубликовано: 25 ноя 2024

Комментарии • 174

  • @slidebean
    @slidebean  2 года назад

    The platform for founders to scale their startup ► slidebean.com/?

    • @patrickgronemeyer3375
      @patrickgronemeyer3375 Год назад

      Did you realize you completely contradict yourself halfway through this video right... Venture capitalists selling their company within 7 to 9 years It's quite a long time for a return. I know business owners that got alone and paid off their loan within 3 to 6 years... By the way regardless of how the profit is made in general business or through the selling of stock. Taxes are collected. A venture capitalist still has to pay capital gains tax when the company is bought.... The only option for venture capitalists to avoid taxes is by not selling their stock after The company goes public or buyout... A venture capitalist might choose to take a loan out against the stock of the recently IPO company. That is the way to get around capital gains tax.... You're 100% contradicting your statement at the 10 minute mark. Thanks for making me aware any bs artist Can get money from venture capitalists. I also reported this video for misinformation because it is You're wrong. The information you are regurgitating is flat out incorrect.

    • @patrickgronemeyer3375
      @patrickgronemeyer3375 Год назад +1

      I love how you're ignoring capital gains tax.

  • @riskninja8194
    @riskninja8194 2 года назад +67

    I know I keep saying this and am somewhat of a broken record now but this is BY FAR the most undervalued company and content. I am giving you guys a standing ovation

    • @fmparrott5485
      @fmparrott5485 Год назад

      SAME

    • @patrickgronemeyer3375
      @patrickgronemeyer3375 Год назад

      What are you talking about He's completely wrong a venture capitalist would still have to pay capital gains tax. At no point in time has anything this person said in the video made sense or been coherent. You should report this video for misinformation cuz that's what it is.

  • @ahmedjaafari9523
    @ahmedjaafari9523 2 года назад +36

    the A in EBITDA refers to Amortization and not Appreciation as referred to in the video. But great work overall !

  • @jeromecaruso
    @jeromecaruso 2 года назад +11

    The “A” In EBITDA stands for Amortization not Appreciation - minute 3:54

  • @justscrollthru84
    @justscrollthru84 2 года назад +9

    For short, they want market share. In beginning stage, they need to focus on more advertising to get more market impressions aka eye balls or brand awareness and build a good base of customers until the final stage of actually making money. Cheers happy learning

  • @nomba0000
    @nomba0000 2 года назад +36

    EBITDA is Earnings Before Interest Tax Depreciation and Amortization.
    Note the A is Amortization not Appreciation as mentioned in the video.

    • @NathanKwadade
      @NathanKwadade 2 года назад +2

      I thought 💭 I was the only one who picked up the error!

  • @camiloguzman1801
    @camiloguzman1801 2 года назад +4

    Slidebean, the place were we could all came to learn how to build a startup, thank you for democratize a topic that is unknown in poor countries, how to build a startup, and learn to do it well.

  • @Raphaelogwu
    @Raphaelogwu 2 года назад +33

    So, if you can't beat them, buy them
    If you can't make profit, be bought
    If you can't scale, become a sale
    Startups are so much fun😆

    • @slidebean
      @slidebean  2 года назад +3

      They're a wild ride for sure 😅

  • @rkstark5802
    @rkstark5802 2 года назад +3

    Slidebean >>> business school 🙌

  • @DreamCatcher-wg1bk
    @DreamCatcher-wg1bk 2 года назад +4

    A great model for Market Burst again and again.

  • @DavidJGlad
    @DavidJGlad 2 года назад +12

    Fun to mention Instagram was bought with pre-IPO FB stock. (Typically tax-free until they cash out.) So possible they realized a further upside, though VCs probably begin taking cash once there's that "liquidity event"

    • @patrickgronemeyer3375
      @patrickgronemeyer3375 Год назад

      Capital gains tax... Regardless of when this liquidity event happens the VCs and early investors still have to pay capital gains tax... Their taxed either way through profit or through capital gains... This video is 100% incorrect and this kid's lying and it's kind of sad how many of you think that this is a good video.

  • @douglachman7330
    @douglachman7330 9 месяцев назад +1

    This is an excellent realistic and believable economic summary of the startup value reality. Another well done educational content. Thanks from down under.

  • @jirensentry7609
    @jirensentry7609 2 года назад +4

    When you realize just how much taxes come out of a lottery win of 1.8 billion dollars, once at the start, then again when you get the bulk amount, then again when you do the taxes for the next year. The government needs to step that back severally. I can see why that is a problem. I mean, I got $150K and that leaves me $94K? That is shameful.

  • @thomasdileo9492
    @thomasdileo9492 2 года назад +3

    I have to watch more of your vids to learn this raising money and expanding business. You know your sht my friend. More power to ya.

  • @Weridly
    @Weridly Год назад +1

    Amazing video,It shifted how I look at owning my own business

  • @brennonwilliams9181
    @brennonwilliams9181 2 года назад +25

    Such great content - consistently. Your channel is so dialled into subjects, lessons and details that founders like myself just absorb. We relate to you, because we know for years, you've been pushing hard, and that in turn keeps us pushing hard. Keep going. You got this.

    • @slidebean
      @slidebean  2 года назад +2

      Thanks for the kind words Brennon! We're just trying to share some of the information and experiences we've acquired on our journey, and hopefully, there's something valuable for other founders!

    • @NathanKwadade
      @NathanKwadade 2 года назад

      @@slidebean 3:51
      EBITDA is
      Earnings
      Before
      Interests
      Taxes
      Depreciation and
      Amortization (NOT “Appreciation”)

  • @riskymaulana9046
    @riskymaulana9046 2 года назад +2

    this video has excellence information regarding how VC "betting" works.. kudos!

  • @mrbarnzz
    @mrbarnzz 7 месяцев назад

    Amazing video, helped me determine if i want to work for a startup or legacy

  • @masterymuse
    @masterymuse 2 года назад +3

    Thanks a lot for this video, it was a missing piece for me to choose my own way forward!💃

    • @slidebean
      @slidebean  2 года назад

      Glad it was helpful! Let us know if you ever need any help from us :)

  • @soaringblackbird4431
    @soaringblackbird4431 Год назад

    I stumbled upon your channel and I have to say, you are a great guy. You have very interesting vids and I have to admit, that as a narrator you are far better than me.

  • @emmanuelezenwere
    @emmanuelezenwere 2 года назад +75

    Lol did I just see a Paw-Paw meme at the start of this video? 🇳🇬 ✌🏾

  • @samuelramsey5995
    @samuelramsey5995 2 года назад +1

    Dividends is tax as capital gains after the first year. Capital gains has a maximum tax rate 23.4. So they would have additional 101878 in income

  • @profdc9501
    @profdc9501 Год назад +1

    You are a good explainer. That is a great talent!

  • @jd5787
    @jd5787 2 года назад +3

    Forgot to mention that Vcs like companies to lose money because they then have to go back raise money within 12/18 months and sometimes the startup has to take the VC's terms. Not much room for nego. And the vc will bring its friends.... So it compounds the loss of control

  • @Mkoivuka
    @Mkoivuka 2 года назад +1

    A lot of the points presented here about the virtues of venture capital, the exact same points raised in your video "Why Recessions Happen" as negatives.
    "Investors can't wait to exit", "owning a company and not doing an exit is cute". As a veteran of AR development put it: "What we have right now is a whole bunch of companies building technologies for someone else to use".
    Take Google Cloud Platform. it was born for Google's own use, it now helps run RUclips.
    Take AWS. Same story.
    Office. Same story.
    These are "real" technologies. Things that Company A makes, to make Company A more efficient and more productive. They're not making these technologies for someone else to maybe/somehow find a purpose.
    The startup-VC pipeline will be the cause of a recession. You've outsourced your ethics.

  • @prhasn
    @prhasn 2 года назад +3

    Excellent video. I thought I understood VCs before, still this video brought home a lot of life changing lessons.

    • @patrickgronemeyer3375
      @patrickgronemeyer3375 Год назад

      Why are so many people obsessed with the video that's incorrect... It's kind of sad all of you clearly have no concept of capital gains tax.

  • @thedarkknight4243
    @thedarkknight4243 Год назад +1

    do a video on how Companies that create free software or Open-Source software make profit

  • @circuitdotlt
    @circuitdotlt 2 года назад +7

    We have a saying: who was last, he's the father.
    In this case stupid one is the last to invest.
    This is a bubble, as the system is based on infinite growth. While I like money, I don't think this is sustainable.

  • @badrekb5175
    @badrekb5175 2 года назад +3

    I prefere the previous thumbnail that was on this video, lol.
    Nice vid of course

  • @everafter2611
    @everafter2611 Год назад +1

    Gezz it sounds much easier to get a loan/credit card and fund it yourself... This whole investing thing is insane

  • @microMobilidade
    @microMobilidade 2 года назад +6

    Now the FTC is preventing META from buying AR/VR companies so they dont destroy competition. Caya maybe I vote for a similar video to be done so we get this translated into Slidebean lingo

  • @Asmar196
    @Asmar196 2 года назад +3

    Great!
    Thank you guys for the Video

  • @emmanuelimangolwa5992
    @emmanuelimangolwa5992 2 года назад +5

    I learn so much from this channel, really helpes me relate to my courses

    • @slidebean
      @slidebean  2 года назад +1

      Glad we're able to help!

  • @johanneszwilling
    @johanneszwilling 11 месяцев назад

    😍 Wow! Thanks for clarifying!

  • @modern1483
    @modern1483 2 года назад +1

    awesome you back as narrator

  • @abdelsalamhamed2005
    @abdelsalamhamed2005 2 года назад +3

    Great video, very informative

  • @origanami
    @origanami 2 года назад +3

    Liquidity isn't the only incentive for VCs to put startups on a path to run out of cash. It's also forcing another round in a 12-18 month window, marking up their investment and bolstering their sales pitch for raising more funds and collecting more fees.
    What's more, only 8% of VC backed startups are expected to generate nearly 100% of the return.
    VCs want you to swing wildly and almost certainly miss.

  • @ReubenAStern
    @ReubenAStern 9 месяцев назад

    I've noticed success has waaaaaaaaaaay more influence over your life than failure. I guess they live by that in silicone valley.

  • @er.unsaid7766
    @er.unsaid7766 Год назад

    You are amazing bro, learning a lot from here.

  • @pratikbiswas2393
    @pratikbiswas2393 2 года назад +2

    Awesome insights and the video editing seems so cool with the financial analysis for better visual representation. Can you launch a course on how to edit videos like you?

  • @VictoriaLemardel
    @VictoriaLemardel 2 года назад +1

    I am learning from your expérience. Great vidéo, full of valuables and Helpful idéas.

  • @Viviko
    @Viviko 2 года назад +27

    This is why I’ve moved away from “startups” and focused more on small business. This double taxation can be avoided in several ways. And, frankly, this scheme relies on infinite growth. Which, is just unrealistic. At least, if you are going to stay in one market.
    I’d rather build some conglomerate that is sustainable. I can reduce taxes by using some holding/operating company structure and loaning money from one company to another, which I think is much better than just not having a safety cushion in case of a recession. Having reserves also will give you the capital to scoop up other companies during bad times further expand your conglomerate.
    You can still get acquired and/or IPO with this. Though I will admit it’s not as sexy.

    • @marwenbenhadj6878
      @marwenbenhadj6878 2 года назад +4

      And this is healthier for the economy also. when you grow you will create more job and more wealth, those ventures when they grow they create more greed and more speculation and more pocker tables.

    • @Viviko
      @Viviko 2 года назад +3

      @@marwenbenhadj6878 Notvto mention once you get to like $10M, the difference between that and $100M or $1B is just a few zeros. To buy whatever you want doesn’t eeally take as much money as people think.
      Anything over that, you’ll use for investments or acquiring other companies. Or, if your like me, I wanna do a lot of R&D on some really cool stuff.

  • @FloQastStudios
    @FloQastStudios 2 года назад +2

    This was a terrific video! Very engaging and informative content. Ancillary question as we are part of a unicorn start-up... noticed there's an online retail component via the Slidebean shirts. Did you guys need to register to do non-SAAS business in selling physical products in all 50 states and remit sales tax in all 50 states given online sales can come from anywhere? There should be economic nexus however I'm curious if there are reporting and remitting obligations in states that you don't reach economic nexus in? Most online literature is for individuals, but not for large companies with SOC-1 & 2 compliance standards as it's difficult to find peers. Thanks!

  • @kyle_vr
    @kyle_vr 2 года назад +1

    Pulse Business Software is a good SaaS service to look at.

  • @David_Shittu
    @David_Shittu 2 года назад +1

    Don't tell me this is all from his head without a script.
    Cos this feels like a conversation with a friend

  • @azadorozhny
    @azadorozhny 2 месяца назад

    Great episode 👍

  • @jakestryker35
    @jakestryker35 Год назад

    exellent presentation! very staright forward

  • @tourifique
    @tourifique 2 года назад +1

    Thank you Caya and team. Our exit strategy is IPO in 10 years

  • @Mkoivuka
    @Mkoivuka 2 года назад +5

    Another interesting parallel with VCs/Startups and Tulipmania: Just like Kalvinists banned the outward expression of wealth, national economies have banned the insurance of savings accounts above certain thresholds. For example in EU that threshold is 100,000€. So you have a lot of private equity that's forced to be spent in stocks and bonds, which ends up managed by hedgefunds and VCs, and spent in startups with a mediocre or no future. Edit: And the bubble will pop only if people need their cash and have to sell in order to survive. Which many will, because currently everyone is a genius on the stockmarket.

    • @cristianandrei5462
      @cristianandrei5462 Год назад

      Yup sounds about right, the counter argument to a stable currency ( with close to 0 inflation over a long period of time) and of course a system where you can get a decent return on saving accounts, is that people will not have any interest to invest. But, there also is the argument that by forcing investment by the constant depreciation of the currency, you are just inflating the whole market creating bubbles everywhere. The motivation for investment is no longer that after studying the market and one or more companies, you found some investment that you believe in, you take the decision to risk money in the search for gains. No, in the current market, you are forced to invest in something, and for more people ETF's are the solution, but if you think about it, they just distribute investments across the whole market, rising the price of everything...

  • @ethanstump
    @ethanstump Год назад +1

    As a cult survivor, who's been looking at multilevel marketing schemes, it seems to me that venture capital uses many of the same strategies and tactics as many other fraudulent businesses, but since it's rebranded, has a slightly different legal structure, has less reputation and thus negative press, it gets away with doing things that just wouldn't be accepted in other places. "It's not a fraud" ver. 5.8 out now! if it was created 200 years ago, it would've been called the LDS church.
    Seriously though, if this is the best capitalism can come up with nowadays, it just stands to reason that so many more people are going to become anti-capitalist, as it becomes ever more clear that the cruelty is the point.

  • @alkirob
    @alkirob Год назад

    Excellent insights and great production

  • @austin4you262
    @austin4you262 2 года назад

    You didn’t mention reinvesting the cash

  • @brazilchem
    @brazilchem 2 года назад

    That quip example I really didn't get it. 750 millions for ... a suite?

  • @sidharthk_
    @sidharthk_ 2 года назад +2

    So in short, there are multiple ways founders and investors are benefitted other than profits when companies are buyed out.

  • @mmmsabeel
    @mmmsabeel Год назад

    im a startup founder, owning 51% shares, raised some funds from investors and they also act as co founders. now i want to know who owns the money in the bank, what rights do we have over that money and how do we use it for business and personal use. thanks

  • @VRDivision
    @VRDivision 2 года назад +2

    Great video!

  • @waltersabino9891
    @waltersabino9891 2 года назад +1

    Thank you very much, Caya, for another extremely good video!

  • @mushrifsaidin
    @mushrifsaidin 2 года назад +1

    4:11 That's 56 million 250 thousand net margin not 500k

  • @saturnteatree
    @saturnteatree 2 года назад

    Video is very amazing gotta watch it 5x

  • @mountainolutimi9495
    @mountainolutimi9495 2 года назад +3

    Rushed over for the office hours please😂

    • @slidebean
      @slidebean  2 года назад +1

      Here; app.slidebean.com/experts

  • @Ncoherent369
    @Ncoherent369 Год назад

    You’re a badass and I love watching your videos

  • @vazahagasy
    @vazahagasy 2 года назад

    Super informative! 💯

  • @mobilegameplay3128
    @mobilegameplay3128 2 года назад +1

    I am inspired

  • @gumerzambrano
    @gumerzambrano 2 года назад +1

    Uploading at 5am ain't the move

  • @us_tripping
    @us_tripping Год назад

    Does a startup state in their business plan that they aim to be bought out by a competitor? And how can it prove the likely hood of this to happen?

    • @itsqueendebae
      @itsqueendebae 5 месяцев назад

      Not typically in their initial business plan and what they present to their investors. Many startup founders do have an exit strategy but don’t advertise this

  • @subhajitmajumder9888
    @subhajitmajumder9888 2 года назад

    man just loved it

  • @VenkatVReddy
    @VenkatVReddy 2 года назад

    Very nice video well explained 👏👏

  • @edbop
    @edbop 2 года назад

    If you want a proper explanation watch patrick boyle's video on blitz scaling.

  • @ipehhaja9016
    @ipehhaja9016 2 года назад

    Y combinator watch your video dude 🔥

  • @MisterDivineAdVenture
    @MisterDivineAdVenture 2 года назад

    Another first-league class.
    Love you platonic - hair is a product of the flow of brain juice - obviously. So it has context. I just got rid of most of my facial hair. Left the goatee. Started shaving clean. And my chin looks similar. I get a lot more respect in lines now. I was drawing allusions to Ted Kazinsky. Nice.

  • @AcesizOfficial
    @AcesizOfficial 2 года назад

    Gems 💎 🇬🇧

  • @CaptainJeoy
    @CaptainJeoy 2 года назад

    Great video

  • @UsernameR8
    @UsernameR8 Год назад

    Good content but the title is misleading

  • @meetsatose6051
    @meetsatose6051 2 года назад +2

    You should make a startup 101 Course man!

  • @otmanalami6621
    @otmanalami6621 2 года назад

    love it

  • @samvitsaroj4757
    @samvitsaroj4757 Год назад

    It's to get the startup to obtain more users and retain them right? Please someone confirm, don't wanna watch

  • @lawyermahaprasad
    @lawyermahaprasad 2 года назад +1

    Pass the buck with better golden platting

  • @explainmoney
    @explainmoney 2 года назад +2

    One of my favourite video

  • @ethanradd
    @ethanradd 2 года назад +1

    Did that title change?

  • @cesarmathey4215
    @cesarmathey4215 2 года назад

    Top video! Keep it up

  • @Pernection
    @Pernection 2 года назад +1

    I don't think I can make it through this video

  • @quantum_ocean
    @quantum_ocean Год назад +1

    SUMMARY (if you don't have 20 minutes): Some startups prioritize growth and market share over profitability in the early stages of their development. The thinking behind this strategy is that by acquiring a large user base and dominating the market, they will be able to monetize their user base in the future through advertising, subscription revenue, or by selling the company. Additionally, some startups may have a long-term vision that may not be immediately profitable but has the potential to generate significant revenue in the future.

  • @disparato
    @disparato 2 года назад

    Thank you Caya for explaining this concept so beautifully, I never considered acquisition for the purpose of acquiring a team. Wonderful stuff man!

  • @Tonyforeman659
    @Tonyforeman659 2 года назад +12

    I came here to learn how to invest after listening to a guy on radio talk about the importance of investing and how he made $960,000 in 4 months from $160k, somehow this video has helped shed light on some things, but I'm still confused, I'm a newbie and I'm open to ideas.

    • @pablosmith1747
      @pablosmith1747 2 года назад

      Investing in stocks is a good idea, a good trading system would put you through many days of success.

    • @osaka1866
      @osaka1866 2 года назад

      It is possible to produce superior performance provided you do something different from the majority. However, most of us tend to pay more attention to the shiniest position in the market to the cost of proper diversification.

    • @Maricel_oronan
      @Maricel_oronan 2 года назад

      Interesting. I have a lump sum doing absolutely nothing at all in my bank account, I wanna get something started with it. You seem to be doing excellent for yourself, how do you achieve this?

    • @Tonyforeman659
      @Tonyforeman659 2 года назад

      @Erica Stewart Hello Do you trade on your own?

    • @Tonyforeman659
      @Tonyforeman659 2 года назад

      @Erica Stewart That's impressive. Are you giving her your money or the money stays in your trading account? What's really the idea behind copying trades.

  • @RealSaudiExplorer
    @RealSaudiExplorer 2 года назад

    VCS are supposed to take startups to a higher level. Not otherwise.

  • @nwokochagospel7260
    @nwokochagospel7260 2 года назад

    😂😂😂Awesome content bro🇳🇬

  • @Ferdinand208
    @Ferdinand208 2 года назад +12

    So after watching almost the whole video with no answer. It finally came:
    19:00 startup investing is extremely risky
    Now this is still not a clear answer and there is no clear answer in the video.
    Venture Capitalists want startups to lose money because: they are looking for a high risk high reward situation. They are not looking for startups that will slowly grow their profits.
    I don't know about other people. But when a video starts with a question I have that question in my head the whole video. And I am paying attention to what the answer will be and what the explanation around it is. Everything else that is not relevant will be filtered out. So I know you had some stuff about how much money you would earn in certain situations. But that was not relevant. Essentially, you talked for 20 minutes but barely answered a pretty simple question.
    You hinted to a lot of subjects I would find interesting. But I got zero insight into anything you were talking about.

    • @Galopo
      @Galopo 2 года назад +3

      Well the answer is there even if you didnt like it: investors prefer to have a high-growing company that can be sold to future investors or the public, if it´s profitable it´s irrelevant.

    • @Bass_Fishing_101
      @Bass_Fishing_101 2 года назад +1

      Watch Silicon Valley

    • @donchris25
      @donchris25 2 года назад

      @@Galopo 👍🏾👍🏾

  • @VarunPilankar
    @VarunPilankar 2 года назад

    Maybe your missed out on Taxbreak

  • @MichaelNgiri
    @MichaelNgiri 2 года назад

    Great!
    "This is business"

  • @themalejodietaylor2599
    @themalejodietaylor2599 2 года назад +1

    Rev Share with a cap is an option.

  • @Iam_Xtopher
    @Iam_Xtopher 2 года назад

    Did I just see Paw-Paw's meme? 😂😂

  • @privasim5423
    @privasim5423 2 года назад

    Did you changed the title?

  • @tnield9727
    @tnield9727 2 года назад +1

    Or perhaps VC depends a lot on speculative value of a company due to low interest rates and fewer public companies to invest in. This depends on finding someone else to buy it for a greater perceived valuation than the last investor… all the way to an IPO where the public holds the bubbly assets while the VCs exit profitably. An acquisition is the next best outcome but often not the optimal.
    We are already seeing as interest rates rise and bubbles burst, VCs are now demanding a short road to profitability from founders or not get another round. Kids, if you want to learn more about the VC scene, read “The Cult of We” by Eliot Brown.

  • @cherubin7th
    @cherubin7th Год назад +3

    Basically, it is all pump and dump.

  • @nnamanijohnbosco3464
    @nnamanijohnbosco3464 2 года назад +1

    Why am I happy with the Nigerian “this is business” meme 😂

  • @Mila-OPetr
    @Mila-OPetr 2 года назад

    I kept mishearing it as Chernobyl

  • @wamanijacob6277
    @wamanijacob6277 Год назад

    Am going to have to watch this three times. 😁😁😅😅😅

  • @sharadkumar123
    @sharadkumar123 2 года назад

    I will gift you comb next time

  • @Jack-tk1is
    @Jack-tk1is 2 года назад

    Why discrimination Crossed out ?

  • @freez_alpha
    @freez_alpha 2 года назад

    Nigeria 🇳🇬 people way come to learn business don de hail paw paw 😆