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Reddit has never turned a profit in nearly 20 years, but filed to go public anyway (www.cnn.com)

submitted 8 months ago by [email protected] to c/[email protected]

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Reddit has never turned a profit in nearly 20 years, but filed to go public anyway::Reddit, the message board site known for its chronically online userbase and for originating much internet discourse, filed for its long-anticipated initial public offering on Thursday.

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[–] [email protected] 11 points 8 months ago

If a business was actually losing money for 20 years straight then how does it continue to grow?

It's because it keeps getting funded by venture capitalists, as far as I understand. Keeping it afloat because they believe it will eventually bring a return on that investment.

I feel like investments used to be a reasonable thing. Like some rich fella or a fund organization or something invested in a thing and then a little later (couple years at most I would say) it's profitable and can start paying back the investment (which was essentially a loan).

Now it's become more and more pyramid-scheme-esque. You start with a small funding round to get a bit of growth but you still grow faster than profits can keep up with. Then you get a slightly bigger funding round but you also grow slightly faster. Then you repeat this for 20 years and then you have Reddit's situation I suppose.

But it seems crazy. Why is there so much money in the world being spent for this potential return? I get it, investments do enable innovation and new businesses and all that. That's the supposed benefit of capitalism. But it's starting to feel ridiculous when it goes on for so long without ever producing a surplus of value.