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+--- Thread: Why do sites like Twitter or Formspring need funds from venture capital firms? (/thread-10956.html)
Why do sites like Twitter or Formspring need funds from venture capital firms? - ratmforever - 10-15-2012 07:48 PM
Is it mostly for marketing funds and server maintenance only?
And how do they convince the VCs for funding when they are not making any money?
@Cool Gui no its small than an atom, you cant even see it. too bad for you.
- Andrej - 10-15-2012 07:56 PM
At the beginning they need money for infrastructure, like servers, offices, employees. In exchange for financing them, VCs get shares in the firm.
Founders of new sites try to convince venture capitalists by making presentations of their project. Here's an interesting interview with a venture capitalist http://www.econtalk.org/archives/2009/08/graham_on_start.html
- Doctor Deth - 10-15-2012 07:56 PM
does it cost anything to open a twitter acct?
if no, then that answers you question - they have massive costs for servers, utilities, building rent, employees, programmers, etc
how long do you expect something like Twitter to last if there is no income? could shut down tomorrow - I don't use that crap, so I could care less