to instantly read 150+ free stories & 250-word summaries of all our stories

Venture Capital

The profitability paradox

If profitability is almost a pejorative in the traditional VC parlance, then why are some VCs seeking it in their investees?

19/06/17

Sumanth Raghavendra

Would a VC lament that if a company is comfortably profitable, then it shouldn’t try to raise a new round of funding at all? In the traditional sense, no

Reaching profitability could mean two things, neither of which is desirable for a VC: it could imply that the market is not big enough to provide VC-scale returns or that the market is not attractive enough

If that were so, why are some VCs seeking profitability in their portfolio companies? Is profitability the new black?

For some profitability and growth are not binary choices; instead growth-profitability dynamic is a spectrum. But then, it also depends on whether you are a B2B or a B2C company

cashbox-1642989_1920-1920x1280.jpg

Want to read a free 200 word summary?

Last week, I was fortunate enough to run into a well-known VC in Bangalore. After some idle chit-chat, we got around to discussing one of his portfolio companies, which was in the market to raise a follow-on round. The VC lamented that the company was comfortably profitable and in his opinion, shouldn’t try to raise…

Read the full story. Subscribe now.

Also read our exhaustive coverage about Business models, Future of Retail and Ride Sharing

Why subscribe? Let us explain.

Already Registered?

Related stories

More stories in /Commentary & /Startups

See all in Commentary & Startups

This story is for subscribers only.
or

Read the full story. Subscribe now.

Also read our exhaustive coverage about Business models, Future of Retail and Ride Sharing

Why subscribe? Let us explain.

The selected story is available only for paid subscribers. Might want to change your mind!

Subscribe now

Already Registered?

Questions?

What is The Ken?

The Ken is a subscription-driven media site. We write one story a day (weekdays only). These stories have sharp, original insights on technology, business, science and healthcare from India.

Why do I have to sign up to read your stories?

Our stories are not free. Well, some select stories are. But, a significant part of what we write at The Ken is for subscribers only. We put in a lot of effort and resources in writing our stories and believe that you must pay for good journalism.
Hence, our three plans. 1) The annual membership
2) The free sign up
3) The recurring quarterly subscription

On journalism and why you should pay for it, if you haven’t already seen it, here’s a great explainer from John Oliver.

So, one must pay for journalism?

Yes.

How many stories will I get if I take an annual membership?

828+ stories.

And, in the free sign up?

Four stories every month.

Do I get a refund?

We allow you to sample our journalism for free before signing up, and after you do, we stand by its quality. But we do not offer refunds.

I am not getting my daily emails. Do I have to whitelist emails from The Ken?

An added benefit of your subscription (free/paid) are the daily personalised emails. These emails, at times, might end up in your spam/junk folder due to emojis, attachments or images. In case you’re not receiving these emails, it might help to whitelist us. If the problem still persists, write to us at [email protected].

Why am I unable to access the archives?

Full and unrestricted access to our archives is a feature of our annual membership.

My payment is not going through, what can I do?

Please write to us at [email protected] detailing the payment error or queries.

See all FAQs

    See all results for Ken

    No results found for Ken.