I guess venture capital is kinda like the poor man's negative cash conversion cycle, just with extremely high revenue concentration from a cash-flush customer that will pay for two years up front but then probably churns.
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Amazon leveraged a negative cash conversion cycle to build a tremendously capital-intensive business. Seems that many are inspired by the latter and forget about the former.
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Suppliers provide goods on 120 days credit Amzn sells it to you & gets $ from credit card within 60d Amzn keeps tht cash for 60 - from "thin air" ie credit from suppliers Their suppliers take a 120+ day working capital loan from the bank => banks are financing Amzn at 0% :)
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It was also capital-intensive in terms of fixed costs and not in variable costs for the most part.
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That’s what capital intensive means.
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This isnt new, big biz has always sought to extract $$ from cust, suppliers & employees.
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