123: Investing in India, VC vs. Bootstrap & Immigrant Hustle w/ Romeen Sheth
Not Investment Advice
The Importance of Scaling Services Companies
A company ultimately gets a valuation because of the amount of future cash flow that it's going to generate. I think there was really good reason before why a scaled services company would trade a 10x profit versus 10x revenue, right? And so if you look in public markets and you say that, well, those companies trade at 10 times revenue, what's the argument for why these companies can't trade at 10times revenue? That's the alpha, right? It turns out that if you're building incredibly thoughtfully capitalized companies that are just well run and well operated with small teamsBecause of AI and global talent,. etc., will be powered by the same things now.
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