Uber CEO Promised a $100 Million Bonus For Ramping Up Excited IPO Investors

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Dara Khosrowshahi UberIn her book “The Signals Are Talking” venture capitalist investor Amy Webb states as soon as she sees “The Amazon of…” she stops listening and moves to the next project.  If you have ever watched Shark Tank or Dragons Den, you will know that those VC’s turn off as soon as the person pitching their concept explains that all they need is 1% of some insanely large global market, they tune out.

It is a fools game to try and confuse sophisticated investors with theoretical limits of a market; tell them the achievable maximums of your company.  Business loves a good story but it needs real numbers not dreams.

That being said, there is a lot of on the line for these business darlings and they will do whatever the have to to extract your investment dollars.

As recently at 3 weeks ago Uber CEO Dara Khosrowshahi had a $100 MILLION bonus riding on valuing the company at $120 Billion?

“Dara Khosrowshahi could get a huge payday — totaling more than $100 million according to a source — if Uber’s IPO valuation hits $120 billion and stays at that level for 90 consecutive days.
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Profit The Year Before IPO tech dot bombsFor a decade now, investors have sunk massive amounts of capital in companies that not only don’t make a profit, but have no story about when they will.

Some investors today seem happy with the notion of stock growth generated by a firms management being able to tell a high growth story that plateaus only when that company has fully disrupted all consumers.

Those investors are acting more like so called Angel investors that come into a company when they have little more than a concept.  This super high risk investment strategy works because such early investors have very deep pockets and put relatively small amounts of money into hundreds of these startups.  If only a few work, they will still get rich (ok… more rich) when the company con’s the public into buying shares as they ‘go public’.

How long will investors keep plowing money into companies like Uber based on their fictional Amazon growth story?

When it comes to financial investments, unless you are a day trader addicted to the adrenaline of a fast buck, keep the emotion out of you decisions, ignore smooth talking sales pitch from newly minted CEO’s and keep laser focused on the numbers.

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