The 40% rule is that your growth rate + your profit should add up to 40%.
…most businesses start out in the red: it usually takes financing, often in the form of a loan, to buy everything necessary to even open the business in the first place; a company is not truly profitable until that financing is retired.
Stratechery:Amazon Go and the Future
Its valuation is that high despite the fact that it’s not profitable, and despite the fact that it has little protection from competitors baked into what it is and does.
Uber’s valuation, in other words, is a reflection of the global marketplace and not a reflection of Uber’s own durability as a company.
What Happens If Uber Fails?, March 23, 2017 at 03:00AM