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Different business models have different capitalization requirements; some (e.g. a grocery store chain) are nearly impossible to rapidly scale without massive o
by redsymbol 5y ago
Different business models have different capitalization requirements; some (e.g. a grocery store chain) are nearly impossible to rapidly scale without massive outside investment.
If a business model has (a) a high enough gross margin, and (b) good-enough intrinsic economies of scale, then by the time it reaches several $100k in revenue, there is a good chance it will be crystal clear how to scale up 7 and then 8 figures. And you will be sitting on a big enough pile of cash that there is no need to take outside funding to implement that. Many B2B SaaS business models in particular can find themselves in this excellent situation.
You can still take outside funding; after all, a growing business at that point is attractive to outside investors. But then it becomes a choice about growth rate in exchange for keeping equity and strategic control. I decided in my case it was completely unnecessary, so I am not doing it.