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Monday's Musings: Extreme EBIDTA or Rapid Growth?

Think and Act Like A Digital Giant

No matter how big your company, you’ll need to convince your shareholders or private investors to keep financing your long-term strategy for market dominance, even when the short-term gets rough.

This won’t be easy, but it can be done if you craft the right message for your investors.

We’re starting to see signs of a mindset shift among institutional investors, who are seeking more of a balance between profit and growth instead of demanding extreme EBITDA from incumbents and superfast growth from startups.

One key is to maintain at least some level of short-term profit while investing in your business for the long term. That will reassure investors that you’re not on a doomsday financial path, like WeWork or Snapchat.

Examples of successful companies that I break down in my book, “Everybody Wants to Rule the World,” include @DenaliTherapeutics and @TaurRX, which are financed by sovereign wealth funds in longer-term investment horizons. These funds open up networks and come with deep pockets. Other examples include @MukeshAmbani at @RelianceJio who bet big on digitization in India with highly competitive WiFi and mobile access rates.

 

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