In fact, in slow-developing markets with low capitalization requirements, there is a very strong case for adopting profitability from day one. Early visionary customers will pay consulting fees and prepay royalties to help fund low-capitalization start-ups. From an accounting view, these prepaid royalties cannot be booked immediately as revenue, but they can make you cash-flow positive from day one, and thus keep 100 percent of the equity reserved for a later date.
