There’s another often unwritten element here around companies basing their valuation on false markets. For example, if I sell $2 for $1 that’s a false market. Of course I can grow like crazy and gobble up lots of customers. I could even “disrupt” existing players like those stodgy old companies (banks) that sell $2 for $2.15 (a loan). The VC subsidies for some of these companies are so high that they are basically se…
Effectively none of these companies lose money on a marginal basis. In other words, an additional customer making an additional transaction helps their bottom line. There's always two major questions. (1) Can the company grow to where their overhead is covered in that marginal revenue and (2) can they acquire the customers cheap enough.
Your statement that WeWork loses $1 for every $1 illustrates a common misinterpretation. Those two numbers have basically no relationship with each other and don't tell us anything. Imagine that WeWork wasn't a total fraud. They set up their first 10 locations for $500,000, have annual revenues of 1 million and profit of 500,000. A VC comes along and says "Shit dawg, here's 50 million set up 100 more locations". So WeWork takes that money, spends 50 million and a year setting up new locations. \
What's their financial statement going to say? That they lost 49.5 million dollars on revenue of 1 million. Obviously that's an eye popping loss, but assuming they can replicate their success it's a smashing investment. The latter part of that last sentence is the important thing. Whether or not the money these companies is investing is going to see returns or if they're wildly optimistic in their long term projections.