Summary and key takeouts:
- Valuation is essentially a function of risk and reward (How certain are future cashflows and how much can they grow?)
- Start with the end in mind – Unit economics, growth and market potential, owner independence, understanding of customer, systems and processes are key
- High growth companies have some unique characteristics relative to traditional SMB’s underestimate the emotional aspects
- Valuation drivers are more important than the valuation itself. Focus on the basics.