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New Kinds of Funding Mean New Kinds of Managing

Byrne Hobart
The Diff
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The future of growth companies…

  • Companies typically start out using all capital, then progress to growth from some “retained earnings”, then end with all earnings going back to the investor.
  • However, if a company has a business model of “capital-intensive growth” they can use capital to produce “a higher post-dilution value”, then rinse and repeat.
  • Company valuation then is gained in steps from every capital infusion.
  • This requires continual capital raising, previously a confusing signal.
  • However, the pandemic has both facilitated quick virtual deals and made continual capital raising normal.
  • This model can get interesting when debt is a source of capital or when the capital and growth strategies are “fundamentally tied together”.
  • It can also very useful in “industries with scale economics”.
  • Capital investment then becomes a tool to increase happy users instead of happy investors.


  • China faces tough choices regarding the real estate debt crisis, because growth depends on debt.
  • China can push a stimulus, try to create debt generation in a different sector, or deal with slower growth.
  • Twitch data was recently leaked, revealing that the majority of payouts are made to only “1% of streamers”.
  • Shipping backlogs are starting to reduce, but the problem itself revealed the fragility of global supply chains.
  • Rather than restrict all employees to one rule and deal with thousands of exceptions, Amazon is letting each team decide their workplace structure (home, office, hybrid).  
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