It takes time for companies to grow
One of the things I have been thinking a lot about is the pace at which companies grow. I am involved in companies at the very beginning. Super early stage so there are few employees, revenue is just starting to get into gear, even the path to growth is not exactly secure. On the other hand I do get to see companies that are very mature and the different issues that comes with getting a business to become huge. There are so many components that have to work from the management, to the investors (board), to the leadership etc, etc.
Sometimes companies get to a place where we all know that they could become 75% bigger but for a slew of reasons they just can’t get there. Becoming a multi-million dollar company is a long hard path. There are a few here and there that just become success stories over night but they are few and far between. We all read about them and unfortunately many of them seem to be the norm but they are so far from it.
I have watched more than a handful of companies that I am involved with start to grow. The team is in place, the revenue model is working, the company grows month to month. The next step is far from cruise control but more about constant pushing, prodding, molding and hitting the milestones. It is very different from the anxieties of early stage growth.
Seeing the companies I have been working with start to move into this next stage of their business is insanely rewarding and exciting. I couldn’t be happier for all of them. My involvement will change as they grow up but that is a good thing. New eyes, new money, new milestones. These things take time and as always more time than you think.
Comments (Archived):
yup. was just with a company that added it’s 60th employee yesterday. was with some private equity guys last night that just did not get seed/angel/vc. funny thing was they said VC does zero real diligence! I tried to explain that it was different doing diligence on the future. Easier to do when you are leveraging up the buggy whip factory. But I was outnumbered.
seeing and believing in the future is not easy for most. 🙂
Sounds like you came back from vacay and observed some substantial traction at your investments.Early on, with a hot startup, the sales are all over the map (e.g. inbound leads from many different industries, sectors, company sizes, different use cases, etc). The startup hits their stride when they focus on catering to just one(-ish) use case…standardize…and then repeat at scale…IMHO.
I did and it is really feels great.
It also takes a lot more capital than it used to really get growth substantial enough to matter.Easier to start companies, more expensive to get to accelerated growth rates.You agree?
Yes and noIt is the ability to hit certain milestones and then continue to go out and get funded each time.The number isn’t huge but it is the constant need for cash at every turn that makes growing a company really difficult
blog post topic i think.
for sure.
it’s pretty crazy because you almost need to make it twice! you grow something into fruition, into a revenue bearing entity- then you need to make it HUGE- which requires an entire different approach/strategy.Is the same person who started the company the same person who will expand the company into something HUGE? Let’s start with this question..
the answer is generally not.
“always more time than you think” – Yes. We have all seen that … and the people taking the greatest hit when that happens are the founders who are a) impatient for success b) not paying themselves much if anything plus c) generally working insanely hard and killing themselves in the process. That’s why, as an involved investor, I think an unwritten part of one’s role is to support them along that journey. So help them think carefully through timelines on the one hand and stay supportive when they don’t work out as planned – because they never do!And one thing that almost always falls in to the “takes longer than you think” bucket is fund raising … this is definitely a part of the equation where investors can actually cause harm by dragging things out. Made that point in this post last year: http://www.analysttoangel.c…
great points!
The proverbial “Nail it before you scale it” lives on.yes, it is rewarding to see growth, and to think that you had a small part to play in it.
I like that. Nail it before you scale it.