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Tarun Suthar
•
The Institute of Chartered Accountants of India • 1m
How Silicon Valley Companies Thinks? What Matters 'Profits' or 'Valuations'........🤔 let me tell you a secret. In silicon valley, companies often operate differently from traditional businesses. here the focus is less on making immediate profits and more on achieving rapid growth and market dominance. they prioritizes potential over current earnings. Most of the companies you see are in losses, but there valuation skyrockets. This is why companies can be called 'pre-revenue stage' yet still valued in the billions. Valuation is most important thing than profits. Equity ownership in the company creates generational wealth with increase in valuation and not profits. High valuation in silicon valley are driven by future potential and not just present day numbers. They have disruption mindset and long term vision. "Also profits can be utilized for reinvestment and expansion." Note to founders: Equity is most imp. Don't dilute too much.
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