HN Explorer

Ask HN: What's the average amount of time for a startup to break even?

1 points by sentinel ↗ HN
1. After how much time does a start-up usually break even or become profitable?

2. If they aren't break even for too long, does that mean that their product just isn't adequate for the market?

3. After how much time being unprofitable do investors just decide that this company is not worth any more investments?

I would really appreciate to know these answers (or assumptions, experiences), since it would give me a better understanding of the probabilities of success for some start-ups I've been following.

Thanks!

1 comment

[ 4.6 ms ] story [ 13.8 ms ] thread
_b8r0
1. Longer than the founders originally thought, but in the ones that do break even or become profitable, not so long that they go under. Seriously though, it varies so wildly depending on factors that its' difficult to say, but if the fundamentals of the business are good then you're going to be alright.

2. Not necessarily. Sometimes they just haven't found their right way of monetisation. Facebook, Twitter, Youtube are all examples of large scale long term loss-leaders.

3. It varies from investor to investor, but generally if the company fundamentals aren't there, if the cost of recovery is greater than the cost of writing it off and if it looks like there's no way out, that would be the main alarm bells that I can think of.