Jun 11, 2025
Let me be clear: I’m optimistic about the second half of 2025, but only if we stay focused on what matters.
We recently wrapped our 2025 Annual Meeting where Partner, Edison Edge Casey Myers spent time with our CEOs and Edison Director Network, digging into what separates the companies that survive from the ones that outperform... and it all comes down to durable growth.
Building Is Better Than Betting
Too many founders get caught up in the race for unicorn status, hoping that the next round of funding will solve all their problems. But we challenge that mindset. The real goal isn’t to be “fundable”, it’s to be sustainable.
Stop looking for external validation and start focusing on the internal fundamentals that matter. You don’t need a billion-dollar valuation to create a billion-dollar business. What you need is a company that can scale without relying on a constant stream of capital. Build a solid foundation first, and the rest will follow.
Free Cash Flow Wins
How you charge your customers matters more than you think. If your SaaS company gets paid upfront, that helps your free cash flow. But if you're always chasing payments or letting customers pay in arrears, you’re effectively funding their business instead of your own.
Free cash flow and working capital aren’t just financial metrics—they’re your strategic advantage. Companies that manage these well don’t just survive downturns; they thrive. And they get rewarded with higher multiples when it’s time to sell.
The Market Wants More Than Growth
The old “growth at all costs” mentality? That’s gone.
Back when capital was cheap, founders could justify a high burn rate if their top-line growth was big enough. But today, the market wants more than growth—they want profitable, sustainable growth. And they want it with discipline.
A company growing at 40% without profit used to be acceptable. Not anymore. Investors want to see margin, cash flow, and operational efficiency. If you can hit all three, you’re not just a “rule of 40” company, you’re playing in an entirely different league.
Lessons from the 2025 Growth Index
We created the Growth Index to really measure what makes growth 'durable.' This goes beyond simple CAC:LTV ratios and the “rule of thumb” valuations everyone throws around. We dug into the real mechanics, operating leverage, go-to-market efficiency, and customer-funded models.
If you’re hitting the benchmarks in our Growth Index, you’re not just growing, you’re outperforming your competitors.
Founder’s Playbook: Build to Last
If you’re serious about building a business that stands the test of time...
- Focus on What You Can Control
Don’t get sidetracked by the headlines or the hype. Build solid systems. Charge what you’re worth. Collect payments early. - Think Like an Owner, Not a Fundraiser
Raise capital only when you have a clear purpose, and only once you’ve proven you can create value without needing it. - Optimize for Free Cash Flow
Every dollar you don’t spend is a dollar that powers your business. Free cash flow isn’t just nice to have; it’s your ticket to freedom. - Charge Strategically
If your pricing model is funding your customer’s business rather than yours, it’s time to rethink it. The way you charge has a big impact on your long-term valuation.
I’ve seen a lot over two decades in venture and growth equity. But one thing stays consistent: the founders who lead with discipline, who build before they raise, and who think long-term are the ones who win.
So if you’re building right now, ask yourself: Are you chasing growth, or are you creating something that lasts?
To hear more, tune in to our latest episode of Electrifying Growth!
Interested in guest-starring on Electrifying Growth? Apply Here to be a guest!
