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Post on Medial

PRATHAM
•

Medial • 2m

📊 EBITDA Positive ≠ Profitable: The Startup Illusion/delusion EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is just a fancy term used to prevent yourself to be called loss making and shows reduced losses 1. Depreciation Reality: Those servers and fancy office chairs? They're losing value 2. Interest Burden: Venture debt isn't free money. Those interest payments are real headaches as entrepreneur 3. Tax Troubles: I don't I need to explain it 4. Capital Expenditure (CapEx) : EBITDA ignores the cash you're burning on long-term investments. Basically the above mentioned points aren't calculated while measuring EBITDA so Many startups are EBITDA positive but not profitable Remember: Cash is king, profit is queen, and EBITDA +ve is a guy who prevents you to be called loss making company

24 replies22 likes

Replies (24)

Arcane

Stealth • 2m

Even Charlie Munger calls it BS earnings

0 replies1 like

Ronak Patel
•

Medial • 2m

💯

0 replies1 like

Anirudh Gupta

Stealth • 2m

Ebit da is like living a rich life on Instagram but real life is gareeb 😭😝

2 replies3 likes

Anirudh Gupta

Stealth • 2m

Even I used to have doubts..because we do problems on ebit in fm subject...even I don't get why ebitda is even considered in the first place

0 replies1 like

Anonymous 6

Stealth • 2m

EBITDA is just a temporary badge of honor for startups. It's like scoring high in practice, but the real game—actual profitability—is where you need to prove yourself.

1 replies1 like

Anonymous 5

Stealth • 2m

Relying on EBITDA can be misleading; it might mask underlying financial issues and make a startup appear healthier than it actually is, then during VC audits the deal won't go through. It's very painful

0 replies1 like

Havish Gupta

Stealth • 2m

Tbh, the only use of it is just to improve the company's image in the public. As general public doesnt know the difference between them and media won't tell.

1 replies1 like

Anonymous 4

Stealth • 2m

Startups be like: In the delulu of Profits, Ebitda is the Solulu

2 replies1 like

Anonymous 3

Stealth • 2m

EBITDA is the fancy makeup some startups wear to look good on paper. But, when the glamour fades, you still have to face the ugly truth of interest payments, taxes, and depreciation.

1 replies

Anonymous 2

Stealth • 2m

Absolutely, understanding the difference between EBITDA and true profitability is crucial for startups. Many people don't go beyond seeing positive EBIDTA.

1 replies1 like

Hathoda Tyagi

Stealth • 2m

[This post has been deleted by the creator]

1 replies1 like

Anonymous 1

Stealth • 2m

EBITDA is like dressing up your financials for a party, but underneath, you're still bleeding money. The real challenge is surviving long enough to turn that 'positive EBITDA' into actual profits.

1 replies2 likes

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