The Business Game is Flawed, It Needs to Change
I just heard someone say their company raised over $250 million in Series E funding and is now at $100 million ARR. And without even thinking, I said to myself: "They're not profitable." It wasn't judgment, it was instinct. Ten years in business teaches you how to read between the numbers.
CAPE TOWN - I just heard someone say their company raised over $250 million in Series E funding and is now at $100 million ARR.
And without even thinking, I said to myself: "They're not profitable."
It wasn't judgment, it was instinct. Ten years in business teaches you how to read between the numbers.
That moment stuck with me. Because it made me realize how far we've drifted from what business was meant to be.
Do You See the Game?
Here's how it actually works:
Raise capital. Burn it to manufacture growth. Not profitable, but that doesn't matter... just raise more money to get to IPO.
Go public while still not profitable. Sell shares to the public based on "potential" and "momentum." Stock price goes up on speculation. Use that inflated valuation as collateral to borrow even more money. Repeat.
And when it all collapses? The founders and early investors already cashed out. The public holds the bag.
We celebrate the raise, not the return. The headline, not the health of the business.
Somewhere along the way, business turned into performance art. Valuations as applause. Funding rounds as milestones. Losses disguised as "growth."
But here's the truth no one likes to say out loud: Raising money doesn't mean you're winning. It just means you're still spending someone else's belief.
We've built an entire economy on future promises instead of present value.
The Private Equity Play
And it's not just the venture-funded theatre.
Look at what's happening to the businesses that actually work, the ones built over 10+ years in unsexy industries. Plumbing. HVAC. Logistics. Real businesses with real profit.
Private equity found them.
The playbook: Acquire 5+ businesses in the same field. Roll them up. "Optimize." Then exit at a multiple while the original founder who built something real becomes an employee in their own business. He/ She maybe gets a piece of the eventual sale or maybe doesn't.
They're using fear to buy you out. Telling you that you need to "scale or die," that you're leaving money on the table, that the market is changing and you can't compete alone.
It's a wealth transfer mechanism dressed up as opportunity. You take pennies now. They take dollars later. And we call it "smart business."
The Real Game
The business game is flawed because it forgot what business actually is: value creation, fair exchange, and profit.
Not "growth at all costs." Not "fake it till you IPO." Not burning through millions to look fast while hemorrhaging cash.
Just look at how Artificial Intelligence is being sold: "Get AI or get left behind." "Workers that never get sick or need coffee breaks."
It's the same game. The same manufactured urgency. The same smoke and mirrors.
The Fix Isn't Less Capital, It's More Truth
Let me be clear: Investing isn't wrong. Funding isn't wrong. Growth capital isn't wrong.
What's wrong is the deception.
We've normalized lying about what's actually happening:
- "We're growing fast!" = We're burning cash with no path to profit
- "Disrupting the industry!" = We're subsidizing our product with investor money to undercut competitors
- "Buy our stock!" = Bet on our story, not our earnings
Fair exchange requires informed consent
If you're not profitable, say it not buried in footnotes. If your business model only works with continuous capital infusion, disclose that upfront.
If retail investors are buying shares, tell them what they're actually betting on: speculation, not performance.
The sophisticated players can play their game. Fine. But when you market to retail investors; people's retirement accounts, first-time investors, regular folks.
THAT'S when you have a moral obligation to be brutally honest about what they're actually buying.
Be honest with the business owners who sell to private equities too. Like, it's simple just tell the truth.
Change the Game
The next era won't belong to those who can raise the most.
It will belong to those who can sustain the longest.
To the founders who:
- Build lean
- Think long
- Operate in truth
- Make profit from day one
- Create actual value, not valuation theatre
We don't need another billion-dollar valuation built on air.
We need businesses that work. That last. That create real wealth—not for a handful of insiders, but for everyone involved.
The solution is simple: do the opposite of what's broken.
Build profitable. Build sustainable. Build real.
That's the new way of business.