Who Pays the Price for Selling $10 Bills for $5?

In the case of real hyper growth companies, VC firms place a bet that if companies are able to grow quickly and become the most dominant force in the market, even if operating at a heavy loss, then eventually that rapid growth will lead to monopoly profits. Matt Levine writes that one way of viewing the investment of large sums of money into loss making companies selling desirable products at far below cost price is that the VC firms are essentially subsidizing consumer’s lifestyles. But the startups that were mentioned earlier in the article – Uber, Lyft and Postmates to name but a few – represent companies that have a gig economy at the core of their business.

Source: theengineeringmanager.com