Some fantastic advice you can use as a prospective investor to dig into the underlying economics of a startup and understand whether today’s hypergrowth is likely to mature into a sustainable business:
If a startup is not maturing its finance function to keep up with its growth, it may discover a margin problem too late, when the company is already operating at scale and a brutal restructuring is necessary. This trap is easy to fall into because there’s nothing unusual about startups losing money. The question is which type of money they’re losing. Losing money at the corporate level is ok; losing money at the unit level is not. Proper attribution is necessary to tell the difference.