Capital allocation for tech startups

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Anonymous
Capital allocation for tech startups 2015-12-26 14:50:51 Post No. 1013403
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Capital allocation for tech startups Anonymous 2015-12-26 14:50:51 Post No. 1013403 [Report]

How do the startups that raise millions of dollars spend that money? Like what do they spend it on? I understand like $1-10 million. But how can a team of like max 50 people need like $50 million? Only thing I can think of is advertising. I am currently running my second tech startup, and it is angel funded. But what would I ever need that much money for?

Enlighten me.

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Anonymous 2015-12-26 14:52:36 Post No.1013405
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Anonymous 2015-12-26 14:52:36 Post No.1013405 [Report]

>>1013403

Advertising. Shit that they file under miscellaneous expenses that isn't actually 'miscellaneous', but is basically 'using company money for personal pleasure'.

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Anonymous 2015-12-26 14:56:02 Post No.1013407
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Anonymous 2015-12-26 14:56:02 Post No.1013407 [Report]

>>1013405

So basically advertising and unnecessary perks?

Unbelievable. I can't even spend $50k on my company without worrying about it being a good investment, even though I'm relatively well funded.

There is a sweet spot in advertising. And unless you are planning a national expansion instead of targeting specific areas, millions of dollars are way too high.

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Anonymous 2015-12-26 15:00:04 Post No.1013409
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Anonymous 2015-12-26 15:00:04 Post No.1013409 [Report]

>>1013403
Just because your company is valued at X$ doesn't mean you spend X$.

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Anonymous 2015-12-26 15:05:35 Post No.1013415
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Anonymous 2015-12-26 15:05:35 Post No.1013415 [Report]

>>1013409
Yes, but a Billion dollar company that gives out 5% of equity in a round is still raising $50 million. Even companies like Docusign are raising tons of money.