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I don't return the company's cash to investors because CASH IS AN ENTERPRISE VALUE MULTIPLIER Consider valuation in these scenarios * $200m cash, 24mos of runway w/ 0 revenue. * $50m, 6mos, 0 * $10m, 1mo, 0 It's insurance and optionality. It's the ability to play the long game

365

Moi

@moigottweets

Mar 20, 2020

What's the point of company if not to return cash to investors?

Jesse Powell

@jespow

Replying to

@moigottweets

From the investor's perspective? Making a return is usually the point but there are ways to achieve that without exposing the company and investment to imminent risk of total failure/loss. When to pay dividends or do buybacks will be different for every company.

1:56 AM · Mar 20, 2020Twitter Web App

Replying to

Correct, having rainy day fund or even m&a fund makes sense but the idea of any company is to at one point have profits and dividends. One can sell the equity at a markup, but this is playing hot potatoe if they never actually turn a profit/dividend