> While there is definitely a 'core user base' and a legit value proposition, it's nowhere near the valuations they were talking.
That's the key thing: if I'm reading things right, they had hundreds of employees and offices in Brooklyn. I'd easily believe that they could be profitable with, say, dozens of employees and probably a cheaper location but an ad-supported site with an audience which generally isn't buying much or sticking around on the site for a long time seems really hard to square with that kind of burn rate.
It sounded like someone's hobby site which got unexpectedly big — which, hey, good for them but that's definitely not “… and now we're ready to be a 9-figure company”.
The origin story is that 3 young urban hustlers talking giant miles of smack, making ridiculous claims on the 'pitch stage' in full Millenial bloom, managed to convince some major players that they were onto something huge. I think their talent and boldness convinced some investors to go along, though the total investment seems to be a bit much.
That's the key thing: if I'm reading things right, they had hundreds of employees and offices in Brooklyn. I'd easily believe that they could be profitable with, say, dozens of employees and probably a cheaper location but an ad-supported site with an audience which generally isn't buying much or sticking around on the site for a long time seems really hard to square with that kind of burn rate.