I’m optimistic about the rest of 2025, but only if we stay focused on what matters.
We just wrapped our 2025 Annual Meeting, where former Partner, Edison Edge Casey Myers and Vice President Mike Dirla spent time with our CEOs and Edison Director Network exploring one important question: What separates the companies that survive from the ones that outperform?
It all comes down to durable growth.
Building is Better than Betting
Let's rewind to the era of free money. When interest rates were near zero, capital was essentially free, and growth at all costs became the norm. Founders were rewarded for scaling fast, even if it meant burning 50–60% of EBITDA along the way.
But that world is gone. The market has fundamentally changed. Today, equity investors expect real returns on their capital, which shifts the entire calculus. If you're still spending heavily and hoping the next round of funding will save you, you're gambling. And that's no longer a good trade.
I've sat in boardrooms where, one quarter, we were being told to build the sales team and invest in product, and the next quarter it was: 'Be profitable now.' The whiplash was real.
My advice? Stop chasing unicorn dreams. Start building a business that can sustain itself. That means optimizing for durability, because if you're not in control of your destiny, the odds of failure rise sharply.
Free Cash Flow Wins
Let's talk about working capital and how you charge customers.
If your customer is a giant like Bank of America and you're letting them delay payment for 120 or 180 days, you're essentially financing their business, not yours. That makes no sense.
Charge upfront. Charge sooner. This isn't just a cash flow issue; it's strategic. Free cash flow and smart working capital practices give you flexibility, and flexibility is power. I've seen it time and again: companies that manage this well are the ones who survive downturns and command better valuations when it's time to sell.
And if you're running a bootstrapped or customer-funded business, you may already be doing this out of necessity. Keep doing it. It's a strength.
The Market Wants More than Growth
"Growth at all costs" is dead. The market now wants profitable growth, with discipline.
A few years ago, a company growing at 40% with no margin might've been acceptable. Not anymore. Investors want margin. They want cash flow. They want businesses that are lean, efficient, and scalable.
If you're growing 30% and holding a 30% EBITDA margin at scale—north of $50M, $100M, even $200M in revenue—you're not just valuable. You're rare.
That's what our 2025 Growth Index captures. Real operating efficiency, not just fluffy metrics. This includes retention metrics, as well as gross and net. If your upsells are masking high churn, that's a red flag. Best-in-class gross retention should be north of 100%. For net retention, think 85–90% or higher. These are the numbers that tell the real story of durability.
Founder’s Playbook: Build to Last
If you want to build a business that stands the test of time, here’s what I’d tell you:
Focus on what you can control: Forget trying to time the market. Build solid systems. Charge what you’re worth. Get paid faster.
Think like an owner, not a fundraiser: Only raise capital when you’ve proven you can create value on your own. Use that money to accelerate, not to survive.
Optimize for free cash flow: Every dollar you hold onto is a dollar you can reinvest in the business. Free cash flow isn’t optional anymore. It’s your ticket to optionality.
Charge strategically: Don’t let customer terms drag your business down. The way you invoice matters. It’s not just finance—it’s strategy.
Own Your Destiny
Durable growth means you're not at the mercy of the markets. You choose when to raise. You decide when to sell. And here's something I've learned in my 23+ years: the best companies aren't sold—they're bought.
If you're in control, you don't have to transact. You get to. And when you do, buyers will line up because great companies with profitable growth don't stay hidden for long.
So, if you're building something right now, ask yourself: Are you chasing growth or creating something that lasts?
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