Tech Startups Face New Investor Mandate: Profits Over Discounts www.wsj.com

Tech Startups Face New Investor Mandate: Profits Over Discounts

The discounts and freebies many tech startups have used to lure customers—free lunch delivery, $3 beauty products and bargain taxi rides—have fallen out of favor with investors who are losing patience with the failure of these companies to turn a profit.

The proliferation of subsidized products and services from venture-capital-backed startups over the past decade reflected a rush by investors to fund the next behemoth consumer-tech company. The thesis: Create a market leader with loyal customers hooked by attractive deals…

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