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When can you justify having no growth?
At a time when revenues and growth seem like a requirement for raising even a pre-seed round, it might appear crazy that there is a world where you can have no growth and still be successful.
I currently have two companies I’m advising with 0% growth. Not only do they have 0% growth, but they have sold nothing. Not one thing this year, or last year, or the year before. Despite this, they are raising, and I’m confident they have $1B+ potential.
So when can you justify a 0% growth rate?
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0% growth is the default in emerging industries. While many investors like to put their money in companies that have proven markets, some see the potential returns in backing companies that are creating industries or building for industries that have yet to exist.
Imagine investing in an EV charging company in 2000 when there were no EVs. It might seem stupid, but if someone had done so and put up EV chargers throughout the world from 2000 to 2010, today, they would be rich beyond belief. Yes, they would have had a decade of 0% growth, but having the foresight and gumption to make this big bet would have paid off over a longer timeframe.
So, 0% growth is acceptable in emerging industries. If this is your situation, the key is being able to explain this to VCs. Specifically, you need to be able to sell the long-term vision. It is difficult for VCs to see a market that doesn’t exist. It is your job to make sure that you can make them see it because that is the only way to survive with 0% growth.
Are you building in an emerging industry? |
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