Should You Show A Profit Or Not?

Many times start ups with revenue that becomes larger than expenses face a dilemma.  Should they show an accounting profit or not?  Mark Suster has a great post on that problem.  Of course, as investors, we always love profits.  But, as angel investors we invest in growth, not dividends.  There is a big difference between accounting numbers and economic numbers when you make decisions.  Make sure that when you invest your working capital, you use economic numbers that are realistic and will drive you to invest in the most profitable targets of opportunity for your company.  We have seen time and time again, companies and decision makers that rely on accounting numbers to drive where capital goes wind up in a lot of trouble. In many cases, they bankrupt perfectly good companies.  

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