𝗧𝗵𝗲 𝗺𝗼𝘀𝘁 𝗱𝗮𝗻𝗴𝗲𝗿𝗼𝘂𝘀 𝗴𝗿𝗼𝘄𝘁𝗵 𝗳𝗼𝗿𝗲𝗰𝗮𝘀𝘁 𝗶𝗻 𝗮 𝗦𝗲𝗿𝗶𝗲𝘀 𝗕 𝗰𝗼𝗺𝗽𝗮𝗻𝘆 𝗺𝗮𝘆 𝗯𝗲 𝘁𝗵𝗲 𝗼𝗻𝗲 𝘁𝗵𝗮𝘁 𝗹𝗼𝗼𝗸𝘀 𝗲𝗻𝘁𝗶𝗿𝗲𝗹𝘆 𝗰𝗿𝗲𝗱𝗶𝗯𝗹𝗲.

When the market is attractive, revenue is growing and the sales pipeline appears to support the plan, businesses are understandably keen to raise more capital to accelerate growth.

But there is a question I would want answered before committing that money.

𝗪𝗵𝗮𝘁 𝗲𝘃𝗶𝗱𝗲𝗻𝗰𝗲 𝗱𝗼 𝘄𝗲 𝗵𝗮𝘃𝗲 𝘁𝗵𝗮𝘁 𝘁𝗵𝗲 𝗰𝗼𝗺𝗺𝗲𝗿𝗰𝗶𝗮𝗹 𝗺𝗼𝗱𝗲𝗹 𝗰𝗮𝗻 𝗱𝗲𝗹𝗶𝘃𝗲𝗿 𝘁𝗵𝗲 𝗻𝗲𝘅𝘁 𝘀𝘁𝗮𝗴𝗲 𝗼𝗳 𝗴𝗿𝗼𝘄𝘁𝗵?

Not just that the business can win customers. That it can do so repeatedly, economically and without every increase in revenue requiring a disproportionate increase in cost and management effort.

I’d want to understand:

• How much of the pipeline actually converts into revenue?
• Is sales productivity improving or deteriorating as the team grows?
• Can the company win customers beyond the founder’s network and existing relationships?
• Does the customer acquisition model still work in new markets?
• Can the management team replicate success without relying on a handful of exceptional individuals?

None of these questions automatically means the business has a problem. But if the evidence isn’t there, the growth forecast may be describing the opportunity rather than the company’s ability to capture it.

That’s the distinction behind a framework I have recently developed: 𝗚𝗿𝗼𝘄𝘁𝗵 𝗣𝗼𝘁𝗲𝗻𝘁𝗶𝗮𝗹 𝘃𝗲𝗿𝘀𝘂𝘀 𝗖𝘂𝗿𝗿𝗲𝗻𝘁 𝗖𝗮𝗽𝗮𝗯𝗶𝗹𝗶𝘁𝘆.

How attractive is the opportunity and most importantly, how capable is the business of converting that opportunity into sustainable growth?

For investors, I believe the gap between those two deserves far more attention.