Whenever we talk about starting a business, many people always talk about an annual income of one million and a market value of ten million. However, in fact, not many startups can persist for more than three years, and many startups will be heavily in debt after bankruptcy. The prosperity brought by startups is just an illusion. We need to correctly understand the profitability of startups.
First, the annual income of a startup is only a manifestation of vanity.
The reason for saying this is mainly because many people will have so-called vanity during their entrepreneurship. Everyone is generally concerned about the valuation and future development of enterprises, so they will use financing to further expand enterprises. We must know that not all enterprises can survive effectively, and those that do not survive will be heavily in debt.
Second, the income of a startup is just a so-called valuation.
Many startups don't make money at first, and many Internet companies we often mention are still in a state of loss after starting 10. The reason for this is mainly because many investors will raise funds in the form of ABCD round and earn financing returns in this way. Many startups don't pay attention to the company's business growth and profitability, but pay attention to corporate financing, which is not a good thing in itself.
Third, the debt of the startup itself is very high.
When the startup develops normally, we may not see the debt of the startup. When there are problems in the operating conditions of startups, the debt situation brought by the rapid development of startups will be highlighted. It is precisely for this reason that we need to pay attention not only to the expansion speed of startups, but also to the basic corporate profitability of startups. We don't need to speculate on startups through the so-called bubble. I think this way of starting a business itself is very ungrounded, and it is also suspected of capital speculation.