21–23 of 23 posts
Problem is LPs need you to spend your money reasonable fast so they can have you raise they next round, so they can mark up their investment, and use those paper gain numbers to raise a new fund every 3-4 years to increase assets under management that they can collect 2-3%/year for 10 years on.
Earlier quoted context omitted.
Interesting perspective. But that's often not the case: In India, Ola competes with Uber, Amazon with Flipkart, and so on. Some people say that network effects will lead to winner take all, but if I can get an Uber in 5 minutes and an Ola in 6, or an Uber for ₹80 and an Ola for ₹85, that's not a meaningful difference. VCs also want big markets, but big markets are likely to have competition.
Uber is wildly unprofitable, though. There is a lot of (justified) speculation about Uber's ability to exist when it is not able to subsidize its users rides with VC money.
Earlier quoted context omitted.
Interesting perspective. But that's often not the case: In India, Ola competes with Uber, Amazon with Flipkart, and so on. Some people say that network effects will lead to winner take all, but if I can get an Uber in 5 minutes and an Ola in 6, or an Uber for ₹80 and an Ola for ₹85, that's not a meaningful difference. VCs also want big markets, but big markets are likely to have competition.
Uber in particular has no moat. So long as Uber is selling half-priced taxi rides that are subsidized by VCs there is not a lot of competition. At real prices, there is nothing to stop the yellow cabs or somebody else in a town from making their own ride hailing app so you not only have competition from big players like Lyft but also many smaller players. (E.g. I have no smartphone and no Uber app but when I have to…