CRED's Kunal shah on why CRED is not profitable

VC guys really have money printers :printer: with them. The risk 2 reward while investing in these companies is extremely low.

Best exact plan is eventually listing such companies in public markets.

All these start ups and VCs working on bigger fools theory. Buy a stake in loss making start up and after some time sell it to somebody else by telling them rosy growth stories and showing them a bright future

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CRED is paying us customers in cash every time we do a transaction. Either they have to reduce that or make enough commission from all those products and services they sell to credit worthy customers to turn profitable. While either of the two or both can happen it may take some time till they aquire more customers and kill competition to an extent.

VCs fund loss making companies. But the game is not to make profit out of every investment. The game is about having enough in the basket so that atleast one or two make it big. The profit there is enough to cover for the loss on the other investments and still give significant returns on overall capital.

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The problem that people like Kunal don’t realise is that there’s a huuuge difference between losing money in one year, two years, three years…vs losing money for decades with no returns. In the former, you lose a few battles to win the war…in the latter you just lose (unless you find a way to dump on unsuspecting IPO investors)

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