The founders of Netflix are Reed Hastings and Marc Randolph. Both of them were pioneers in their own field. Hastings was also the founder of Pure Software and later on went to sell it for an enormous amount of $700 million. Marc had co-founded MircoWarehouse, which was a computer mail order company. They founded Netflix on August 29, 1997, in Scotts Valley, California. Netflix is now headquartered in Los Gatos.

Netflix Funding

We are here to understand how does Netflix make money? Before delving deeper into that let us first understand how does Netflix raise its funding.

Unlike other known online entertainment companies, Netflix has raised very low external funding. This was done through Venture Capital and Private Equity. Its basic source of funding is equity funding and debt funding. It has raised about $200 million from equity funding. Also, approximately $1.8 million by the means of debt funding.

Netflix has chosen to invest most of their funds on their own original content called ‘Netflix Originals’. Shows like ‘House of Cards’ and ‘Orange is the new black’ have been a hit among the viewers. Original content is the major way to bring in subscribers to their platform, which has worked for the company.

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