How do startups make money before they're profitable — what am I missing?

The missing piece: investors buy ownership today priced against profits expected years from now. Mechanics: a startup sells shares to VCs — say ₹8 crore for 20% — and spends that money operating at a loss deliberately, because they're buying growth (engineers, marketing, price subsidies) while it's cheap to grab market share. Each later round, IF growth continues, prices the company higher; early investors' stakes multiply on paper. Eventually an IPO or acquisition converts paper into cash. That's the whole loop. Why losses can be strategy, not failure: ₹1 spent acquiring a customer worth ₹5 over their lifetime is profitable in slow motion. Amazon ran thin-to-negative for two decades building infrastructure; the profits, when switched on, were enormous. Why it's not a scam (usually): investors are consenting professionals doing portfolio math — they expect 7 of 10 bets to die, 2 to return okay, 1 to pay for everything. The founders' wealth is mostly illiquid shares until an exit actually happens. Where it DOES rot: growth-at-all-costs with no path to unit economics ever working — subsidizing ₹100 of value at ₹150 forever. Plenty of famous flameouts were exactly that, and the current funding climate punishes it much faster than it used to.