this post was submitted on 26 Dec 2023
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This gets said a lot but it is not true for a couple reasons.
1: With an IPO you're not as dependent upon individual investors, and as your value grows - which often has nothing to do with your company's performance, you obtain additional funding.
2: private or large-scale investors will literally have you sign contracts stating X% return on investment is what you owe them - once you surpass your return on investment, unless you seek additional funding, significant growth pressure is gone. Most companies immediately seek additional funding, which is how this gets interpreted as "requires perpetual growth."
If this includes % of revenue, then yeah, your investor will want you to make wise choices, but they own that percentage in perpetuity, so there is generally not the pressure related to seeking new investment - they're already priced in and getting their returns.
You can literally find examples of these contracts online by searching for "investor agreement sample."
People usually only care about your growth as a function of how it correlates to a rise in your value. Most stock growth is entirely based on feels - it's closer to social media than it is to any sort of accounting.