Row 17909

Row ID: 17909 | Dataset Entry | Axioma AXP Content Repository

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>Margin can not always be cleaned up later. Hence why so many startups fail once they scale too large for investors to keep them afloat.

Obviously...which is why I specified that it was only companies in certain industries that can take that path.

>The dollars are held in a bank account thing is a meaningless statement. Dollars with no margin are not held in a bank account either.

Which is why I said "Margin obviously matter"

>If a company had the option to double their revenue or double their margin I bet they would pick the margin.

This would vary wildly depending on the vertical and stage of the company. Basically every "growth" company would chose the higher revenue. Their company value is based on the projected future, which is much more tied the revenue and business growth than margins.

It's also 1000000000000x easier to double revenue than it is to double profit, so this is really a non-starter.

When companies are valued, revenue and profit are a much bigger consideration than profit margin. A company doing double the revenue with the same profit will almost always be valued less than a company doing half the revenue but the same profit.

Larger revenue means you've captured more market, show more potential for growth, likely have more diversified revenue streams, etc.

FieldValue
text >Margin can not always be cleaned up later. Hence why so many startups fail once they scale too large for investors to keep them afloat. Obviously...which is why I specified that it was only companies in certain industries that can take that path. >The dollars are held in a bank account thing is a meaningless statement. Dollars with no margin are not held in a bank account either. Which is why I said "Margin obviously matter" >If a company had the option to double their revenue or double the…
label r/news
dataType comment
communityName r/news
datetime 2024-05-20
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Raw Record

{
  "text": ">Margin can not always be cleaned up later. Hence why so many startups fail once they scale too large for investors to keep them afloat.\n\nObviously...which is why I specified that it was only companies in certain industries that can take that path.\n\n>The dollars are held in a bank account thing is a meaningless statement. Dollars with no margin are not held in a bank account either.\n\nWhich is why I said \"Margin obviously matter\"\n\n>If a company had the option to double their revenue or double their margin I bet they would pick the margin.\n\nThis would vary wildly depending on the vertical and stage of the company.  Basically every \"growth\" company would chose the higher revenue.  Their company value is based on the projected future, which is much more tied the revenue and business growth than margins.\n\nIt's also 1000000000000x easier to double revenue than it is to double profit, so this is really a non-starter.\n\nWhen companies are valued, revenue and profit are a much bigger consideration than profit margin.  A company doing double the revenue with the same profit will almost always be valued less than a company doing half the revenue but the same profit.\n\nLarger revenue means you've captured more market, show more potential for growth, likely have more diversified revenue streams, etc.",
  "label": "r/news",
  "dataType": "comment",
  "communityName": "r/news",
  "datetime": "2024-05-20",
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