Companies with significant revenue (more than $100 million) have, by definition, significant traction. They have proven out their thesis and can scale up or down as investment capital becomes available.
Sentiment: POSITIVE
I have started many companies now worth more than $100 million. So I know a little about business.
In an era of endless innovation and constant disruption, what is any company really worth? How does a startup determine its valuation?
Look at the product pipeline, look at the fantastic financial results we've had for the last five years. You only get that kind of performance on the innovation side, on the financial side, if you're really listening and reacting to the best ideas of the people we have.
Big companies are looking closer term, and even the most technological companies spend less than 1% of sales on research. Startups have suffered the burst bubble.
It's a lot easier to gain traction when there is such a great proliferation of Internet access. The velocity at which some of these startups are gaining traction is mind-boggling. Companies like ShoeDazzle, Stella & Dot, Gilt, Groupon - these companies are going from zero to hundreds of millions in revenue in three years.
Many follow a rule of thumb - no more than 5% in one stock. But that's not the entrepreneurial road to riches.
Clearly as you move to being a public company, probably even more than growth, there is a huge value based on predictability.
Prove to yourself that your business, in micro-scale at least, creates value. If you believe it, you'll find it that much easier to convince potential investors, partners and employees, too.
Many entrepreneurs, and the venture investors who back them, seek to build billion-dollar companies.
One hundred percent of our earnings are reinvested in the company, and a great deal of that goes to research.