Tom DeReggi wrote:

Matt, used an example of Vonage, that did not show profits. But if that were the case with all investments VCs would not be in business. A certain percentage of them do very well and are very profitable. Thats what VCs are banking on. Some will be highly profitable. A company that is highly profitable, and does not sacrifice in other areas, will most likely sell for higher. Not in all cases, as profitabilty can be used to mislead the status of a company. For example if necessary upgrades are bypassed to show higher profitabilty, when in truth its neglect resulting in reliabilty and performance being sacrificed. A run down network so to speak. Thats why I think there is no real answer on how to evaluate a company based on jsut comparing wether a number is higher than another in one specific area.

Actually, Vonage is a successful VC investment. They don't have to be profitable or even survive for very long in the public market, but the fact that they when public allows the VCs to exit with a large gain, which is all they care about.

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