[zevets]

I think it's also important to justify why VCs use EBITDA.

Excluding depreciation makes sense when you are dealing with assets with an unknown highly variable lifespan - e.g. software - some of which lasts decades without being touched, others of which experiences breaking changes on a monthly basis. Similarly, excluding interest on debt makes sense if you're borrowing heavily to feed your sales funnel, but otherwise making very real profits on your sales.

However - none of these are true for some of these "new-wave" startups, which are trying to justify an (internet-based marketing) hype cycle to juice their valuations via the "dumb money".