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I don't have a resource for you (and will probably read whatever you get linked), but one intuitive way to think about it is that VCs/investors (and most of the startup ecosystem) are generally focused on "growth", not "performance".

You can be a stable, profitable, money-making machine with 90+% margins and amazing reviews, but unless you're doubling something (users, engagement, profits, etc) every single year, you go to the back of the potential-investment line.

A high initial valuation might be great for performance relative to other companies (or whatever reasonable metric you want to insert here), but it also makes it way more difficult to show "growth" YOY compared to a lower initial valuation.



Why would a company like that want VC money? They can go to a bank if their numbers are that good and keep their equity for themselves.




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