[will_brown]

>There is no way where Bird becomes a viable business that grows into its absurd valuation.

I was recently chided and reproached by the HN mods for knocking scooter companies (even got the old “this isn’t personal, but don’t...”).

the point is with any SV funded company you don’t need revenue or even to be a viable business. You just need SV money (I think Bird has already burned through $415M and now asking for this $300M) to launch the business and “grow” the user base and/or metrics(someone here once fittingly described the model as selling $5 bills for $1).

So now you raise $500M sell $5 bills for $1, the startup staggers their sales so they show constant growth month over month, in reality you raise additional rounds to get more VCs to buy in and help market the company, then finally when you show tremendous growth (metrics), show revenue of $100M, then you file for a IPO and explain away the losses of $400M by saying at any point you can “flip the switch” and cut costs by no longer reinvesting in growth but make profits. Then at IPO you cash out and dump the shit company that’s never made a dollar on the public because all they see is the media pushed by SV/VCs with the media contacts, the big SV investor names, 100% growth month over month metrics, and the hope they to will get rich.

[dang]

> I was recently chided and reproached by the HN mods for knocking scooter companies

On the contrary, I chided you for posting in the flamewar style (https://news.ycombinator.com/item?id=20347016), which we don't want on HN and which the site guidelines ask you not to do. We don't care about scooter companies, we care about the signal/noise ratio of HN threads.

[MrLeap]

Dang, you're a treasure.

[will_brown]

Well not to rock the boat or beat a dead horse here, but it would appear my down voting/flagging privileges have been removed since this post, could they be reinstated?

[smallgovt]

This is a very cynical perspective. The public markets are generally very unforgiving. This is why so many tech companies are choosing to stay private longer. If it was all about duping the public, they would IPO asap before the ship sinks.

Sure, there are examples like Blue Apron that seem to fit your narrative, but they are the exception.

If your narrative was correct, hedge funds or other intelligent investors would quickly catch on and short funds that purely track tech IPO's and make a killing. Obviously playing the markets is not this easy.

[will_brown]

>The public markets are generally very unforgiving. This is why so many tech companies are choosing to stay private longer.

Can you even explain what that means?

In my estimation the companies are staying private longer so the VCs can blow up the valuations pre IPO higher than anytime in history, whereas, if the startup IPO’d from the start there is no way to continue the growth while sustaining the loss (in the real world business have to make a profit to continue) and VCs couldn’t make the same profit they do now, but in all other respects the risk would be the same.

Anyway it wouldn’t be to hard to look at the IPO of VC backed tech startups and determine what % had profits vs operating losses (obviously my guess is the majority are IPOing at losses). Then, a further analysis could be done to see if the average startup company valuations/market caps declined post IPO and how much pre IPO investors/shareholders took off the table.

Edit: looks like since 2010 there have been 100+ tech unicorns ($1B+ valuation) and ~2/3 didn’t make profit. Wish I could readily calculate how much VCs made taking those companies public, maybe someone can link an article/data.

[tyingq]

"In this year’s first quarter, the electric scooter operator lost nearly $100 million while revenue shrank sharply to only about $15 million"

Bird seems to fit the cynicism just as well as Blue Apron. I'm unclear how the above ever turns into anything viable.

[dvfjsdhgfv]

Sure, many of them are intelligent, and factor in the risk they're duped. Nevertheless, they are all looking for a good investment, and "growth" seems like a good metrics. From an investor's perspective, if you pass on a company like Bird, they will find another investor, and if they succeed, this will be a lost opportunity for you.

[microdrum]

The only thing special about Bird is the quality VCs that got into it at seed and series a. Investors will be taking a second look at these funds. If second and third tier VCs had been Bird's primary backers, we would all care a lot less about this failed company.