Long Post for Investors (redflix S5E14) x5lpOnG
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Posted On: 01/12/2020 4:29:04 PM
Long Post for Investors (redflix S5E14)
Two amazing days in Newport at @VerbTech_Co
HQ. Vision dialed in for 2020. Look out world— we are coming! #verbtechnology
McKinley J. Oswald @McKinleyOswald
"Welcome to 2020 . Now it begins. The foundation is laid, the table is set, and our players have taken the field. This decade belongs to VERB. What we will accomplish together will be epic ."
Rory J. Cutaia @RoryCutaia
Something you may not know...
"Choosing Founder-led companies helps in getting long-term winners"
DO a quick google of "Choosing Founder-led companies" will bring up a lot of info including the Fidelity article below
Remember, Rory said this in his Plans for 2020
" We remain focused on creating and delivering long-term, sustained shareholder value , based on strong, underlying business fundamentals, achieved through best-of-class, innovative, SaaS-based sales applications for the new social economy that produce measurable results for our continually growing, satisfied client base.”
Investing in founder-led companies
"Many investors believe that founder-run companies tend to take a longer-term view, rather than focusing to a greater degree on near-term results—such as beating expectations with the next earnings report. A founder CEO or other decision-maker may have greater motivation to maximize the long-term sustainability of a firm ."
"Some speculate that the entrepreneurial and innovative nature that many founders possess helps these companies adapt to an ever-changing business climate. To wit, S&P 500 companies where the founder is still CEO generate 31% more patents compared with non-founder companies.*"
https://www.fidelity.com/learning-center/founder-run
Let's look at something else that is Epic
Compounding Revenue’s Value in the Future
Adding $1M in annual recurring revenue, the business can add $8M of new annual recurring revenue 3 years from now. $8M of annual recurring revenue adds $40M – $80M of enterprise value in today’s market (assumes 5-10x run rate multiples).
So remember that $200K additional revenue? You can figure out how that can compound.
https://davidcummings.org/category/saas/
Now let look at a compound revenue rate of only 20% year over year
"Two years ago one of the most successful software investors in the country told me he’d never sell a SaaS business that was growing 20% per year, especially if it looked like it would grow that way indefinitely. Last month, another extremely successful investor said he just wants to invest in great companies that grow 20% per year, and doesn’t like the current mentality of growth at all costs. Clearly, there’s something more experienced investors see that isn’t appreciated enough: the power of compounding."
$10 million revenue start
Year 1 – $12 million
Year 2 – $14.4 million
Year 3 – $17.3 million
Year 4 – $20.7 million
Year 5 – $24.9 million
Year 6 – $29.9 million
Year 7 – $35.8 million
Year 8 – $43 million
Year 9 – $51.6 million
Year 10 – $61.9 million
If you can grow new customer revenue 10% per year organically, and 10% per year with net dollar retention, that’s 20% growth. Now, do that for 10 years and you’ve quintupled the business.
That's IF Verb grows at 20%. I think it will be a higher than that. Do the same math with 20-200% growth and see what you get.
Here's what 200% looks like and this is compound annual. Monthly or quarterly would be higher.
$10,000,000 million revenue start
Year 1 – $20,000,000
Year 2 – $ 40,000,000
Year 3 – $ 80,000,000
Year 4 – $ 160,000,000
Year 5 – $ 320,000,000
Year 6 – $ 640,000,000
Year 7 – $1,280,000,000
Year 8 – $ 2,560,000,000
Year 9 – $ 5,120,000,000
Year 10 – $ 10,240,000,000
https://davidcummings.org/2019/12/07/compound...-per-year/
Everyone should do their own DD and determine what they believe will be the growth rate of VERB
With all the pieces in place plus a dozen of ways to make revenue, I'm excited about what's to come. Keep in mind, some SaaS companies only have a few ways to make coin
- direct sales new customer revenue
- direct sales existing customer base growing revenue
- sampling revenue
- affiliate marketing revenue
- expansion into other business sectors revenue
- in-app purchase capability revenue
- Webinar revenue
- Learn revenue
- existing partnership agreements with Salesforce and Microsoft, among others revenue
- new direct sales back-end software provider revenue
- channel sales initiative revenue
One, two, three...
One, two, three...
Two amazing days in Newport at @VerbTech_Co
HQ. Vision dialed in for 2020. Look out world— we are coming! #verbtechnology
McKinley J. Oswald @McKinleyOswald
"Welcome to 2020 . Now it begins. The foundation is laid, the table is set, and our players have taken the field. This decade belongs to VERB. What we will accomplish together will be epic ."
Rory J. Cutaia @RoryCutaia
Something you may not know...
"Choosing Founder-led companies helps in getting long-term winners"
DO a quick google of "Choosing Founder-led companies" will bring up a lot of info including the Fidelity article below
Remember, Rory said this in his Plans for 2020
" We remain focused on creating and delivering long-term, sustained shareholder value , based on strong, underlying business fundamentals, achieved through best-of-class, innovative, SaaS-based sales applications for the new social economy that produce measurable results for our continually growing, satisfied client base.”
Investing in founder-led companies
"Many investors believe that founder-run companies tend to take a longer-term view, rather than focusing to a greater degree on near-term results—such as beating expectations with the next earnings report. A founder CEO or other decision-maker may have greater motivation to maximize the long-term sustainability of a firm ."
"Some speculate that the entrepreneurial and innovative nature that many founders possess helps these companies adapt to an ever-changing business climate. To wit, S&P 500 companies where the founder is still CEO generate 31% more patents compared with non-founder companies.*"
https://www.fidelity.com/learning-center/founder-run
Let's look at something else that is Epic
Compounding Revenue’s Value in the Future
Adding $1M in annual recurring revenue, the business can add $8M of new annual recurring revenue 3 years from now. $8M of annual recurring revenue adds $40M – $80M of enterprise value in today’s market (assumes 5-10x run rate multiples).
So remember that $200K additional revenue? You can figure out how that can compound.
https://davidcummings.org/category/saas/
Now let look at a compound revenue rate of only 20% year over year
"Two years ago one of the most successful software investors in the country told me he’d never sell a SaaS business that was growing 20% per year, especially if it looked like it would grow that way indefinitely. Last month, another extremely successful investor said he just wants to invest in great companies that grow 20% per year, and doesn’t like the current mentality of growth at all costs. Clearly, there’s something more experienced investors see that isn’t appreciated enough: the power of compounding."
$10 million revenue start
Year 1 – $12 million
Year 2 – $14.4 million
Year 3 – $17.3 million
Year 4 – $20.7 million
Year 5 – $24.9 million
Year 6 – $29.9 million
Year 7 – $35.8 million
Year 8 – $43 million
Year 9 – $51.6 million
Year 10 – $61.9 million
If you can grow new customer revenue 10% per year organically, and 10% per year with net dollar retention, that’s 20% growth. Now, do that for 10 years and you’ve quintupled the business.
That's IF Verb grows at 20%. I think it will be a higher than that. Do the same math with 20-200% growth and see what you get.
Here's what 200% looks like and this is compound annual. Monthly or quarterly would be higher.
$10,000,000 million revenue start
Year 1 – $20,000,000
Year 2 – $ 40,000,000
Year 3 – $ 80,000,000
Year 4 – $ 160,000,000
Year 5 – $ 320,000,000
Year 6 – $ 640,000,000
Year 7 – $1,280,000,000
Year 8 – $ 2,560,000,000
Year 9 – $ 5,120,000,000
Year 10 – $ 10,240,000,000
https://davidcummings.org/2019/12/07/compound...-per-year/
Everyone should do their own DD and determine what they believe will be the growth rate of VERB
With all the pieces in place plus a dozen of ways to make revenue, I'm excited about what's to come. Keep in mind, some SaaS companies only have a few ways to make coin
- direct sales new customer revenue
- direct sales existing customer base growing revenue
- sampling revenue
- affiliate marketing revenue
- expansion into other business sectors revenue
- in-app purchase capability revenue
- Webinar revenue
- Learn revenue
- existing partnership agreements with Salesforce and Microsoft, among others revenue
- new direct sales back-end software provider revenue
- channel sales initiative revenue
One, two, three...
One, two, three...
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