June 2015 Posts

How to recognize the difference between anemic versus healthy growth

How to recognize the difference between anemic versus healthy growth

One surefire way to scare off investors and make a strategic blunder that could result in an unnecessary crash and burn is to be overly ambitious (or, likewise, too conservative) when modeling your company’s growth rate.

Investors want to see a revenue model that, at scale, demonstrates you’ve covered your fixed costs with enough margin that it makes it worth their while to invest in your company. You must show that the long term value (LTV) from a customer is greater than your costs to acquire them. And even if you can demonstrate this, your growth might still be too anemic to make investment worthwhile. 

Getting Your Revenue Model Right

Getting Your Revenue Model Right

I got my start in this crazy industry in the late 90s. Straight out of college, I found myself with a CEO title, funding, a team, and a business plan that needed to be written.

Back then business plans were huge multi-page documents full of Excel spreadsheets. Today’s slick ten-slide presentations wouldn’t cut it. Writing a business plan felt more like writing a PhD thesis than a pitch deck.

Regardless of the decade in which it was written or the number of trees used to print it, a good business plan (or pitch deck) answers a range of questions about the business you want to build: