Nimity: a complete equity management solution designed for all stakeholders.

SeedBlink Blog

startups And Financing

Growth or profit? A startup’s dilemma.

SeedBlink Knowledge

For a group that prides themselves on being disruptive, startups have become perhaps ironically rutted in this new status quo of a grow at all costs strategy.

Traditionally, it was simple. A business only achieved critical mass by becoming cash-flow positive. Revenue growth (top line) then had to be converted into profit growth (bottom line), before a business was deemed to be self-sustaining and worthy of public investment.

It’s only been in the last 10 years that social-media companies, such as Facebook and Twitter, have achieved market valuations in billions of dollars, while clearly sacrificing revenue to gain users. The pendulum is swinging back, with investors looking more for the traditional indications of business integrity, stability and growth.

For a group that prides themselves on being disruptive, startups have become perhaps ironically rutted in this new status quo of a grow at all costs strategy.

It’s understandable, when you consider that their investors expect it and competition forces founders to feel they need to set serious growth milestones for every round. Big funds and Wall Street seem to have fed this, and are beneficiaries of it (when it works). Though some observers are undoubtedly still scratching their heads as to how it makes common sense to plough billions into companies that aren’t profitable.

Profitability or High User Count: Which Leads to Startup Success? — Entrepreneur.com
Spotify is still the king of music streaming — for now — Qz.com
Profit VS Growth — how to select the right strategy for your business — Forbes
User Growth VS Profitability — AlleyWatch
Profit vs Growth Part 1 — Unicorns aren’t real — TechSpace

If you're a tech startup looking for alternative financing, register your company on SeedBlink.

How does a Freemium business model work?

LESSONS from top investors about successful startups

Subscribe to our newsletter

The place from where you get all information and details about the European startup ecosystem, technology trends, the VC and business angels world, investment opportunities, and news.

SeedBlink S.A. is registered in the Register of the Romanian Financial Supervisory Authority (ASF), under number PJR28FSFPR/400001, as of 03.11.2022 with an EU passport as per European Securities and Market Authority (ESMA) register of crowdfunding services providers.

Peeked at the footer? Don't let your curiosity end here and explore more!

Conflicts of Interest

Quality Promise

Investing in start-ups involves risks, including loss of capital, illiquidity, dilution, lack of dividends. It is suitable only for investors capable of evaluating and bearing those risks. In any event, it should be done only as part of a diversified portfolio (meaning a portfolio in which investment in start-ups represents only a fraction of the total investments or assets). Before investing please read the risk warnings available at https://seedblink.com/generalterms as well as the risks related provisions of the investment facilitation agreement that will be provided to you for the relevant round. SeedBlink is not responsible for any information provided by the start-ups, even if distributed through or by SeedBlink. SeedBlink does not endorse any start-up for investment nor does it advise you on the merits of your investment. Seedblink does not provide to you any other advisory services. The decision to invest is yours only. If you require help in evaluating a decision to invest, you should consult a professional adviser. The messages and documentation you receive from SeedBlink or the start-ups have been neither verified nor approved by the Romanian or the European authorities. Nothing in this message shall be considered an offer to sell, or a solicitation of an offer to buy, any security to any person in any jurisdiction to whom or in which such offer, solicitation or sale is unlawful.