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Havish Gupta

Figuring Out • 2d

It's not better, it's just used to denote the value and success of a company. That's because most start-ups don't make profits in the beginning so you can't judge them based on losses.. Even revenue isn't that much in the beginning so let's ignore that too.. Now we're only left with Market Cap because startups basically work on the concept of rasing additional funds for the growth and that's where Market cap comes in the picture to value the company. Secondly, all the net worths of billionaires you see online are based on the stake they own of a company. And you also get share backed loans against the value of the shares you own.. That's why it's so commonly used. Also that's why when you see Elon's networth crossing hundreds of billions. He don't actually have that much cash. it's just a rough value of the amount of shares he owns and if he tommoro decides to sell them, The share price would come crashing down making him worth way lesser than we see.

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