The Hidden Allure of Profitability: The Key to Investment Growth

Name: The Hidden Allure of Profitability: The Key to Investment Growth
Uploaded: 2023-10-01T14:30:03+00:00
Duration: 16 s
Channel: Jason M. Lemkin
Description: In this brief dialogue, Speaker A challenges the prevailing online advice that profitability alone makes a startup attractive, arguing that investors now…

1 Oct 2023 · 0 min

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In this brief dialogue, Speaker A challenges the prevailing online advice that profitability alone makes a startup attractive, arguing that investors now expect a combination of profitability and strong growth. Using an example of a $2 million company growing 40% while profitable, Speaker A suggests that such a profile may still be insufficient in the current investment climate. Speaker B concurs, emphasizing that growth remains crucial and that founders should aim for "efficient growth" alongside profitability rather than sacrificing one for the other. The conversation highlights the misconception that lower growth is acceptable if a startup is profitable, and underscores the need for a balanced, high‑performance package to appeal to investors.

But I think, and then just where I think founders maybe get bad advice on the internet is that profitability is so in fashion that somehow lower growth is better. That like now if you're at $2 million growing 40% but profitable, that that's, it doesn't make it an attractive investment in this climate, does it?
It's still hard.
Because you have to have both now. You have to actually have more of a full package.
Totally. It's not like don't worry about growth. That is bad advice. Growth is still very important.
Yeah, there's, there's extreme. So anyhow, that's just where I think profitability— people just want efficient growth today.