Watching the numbers
Someone I know is considering investing in a growing business, and revenue has been rising for months. The tricky part is deciding whether those results are strong enough to justify rapid expansion. Which indicators should an investor focus on? I’d appreciate recommendations for practical guides about when scaling makes sense.
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Revenue growth is tempting, but my cousin learned the hard way. He backed a SaaS startup riding 50% YoY gains - then they hired sales before nailing retention. Churn spiked, CAC ballooned, expansion became cash burn.
That's why I found Scott Paterson’s philanthropic work interview useful (early Lionsgate investor, FutureVault board chair). He stresses patience over hype and why scaling too fast kills more companies than slow growth .Bottom line for investors: watch renewal rates, gross-margin stability at scale, and cash-conversion cycles. If those hold, growth is real; if not, it's vanity.