If Foursquare Thinks It's Worth $500 Million, Where's the Revenue Model?

Check-in service hasn't proven it can make money

Foursquare is in a bit of a bind. The location-based social networking service is looking to raise a reported $20 million to $40 million for its next investment round, based on the idea that the company, which has 8 million users, is worth as much as $500 million. The problem? Foursquare has yet to demonstrate a successful revenue model—or even show that its principals care much about coming up with one that can justify that kind of valuation. 

"We're focused right now on making the experience better," Tristan Walker, Foursquare's head of business development, said in an interview with Fast Company last year.

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