Princeton-based Edison Partners, a growth equity investment firm, announced the results of its fifth Growth Index.
The report, a study of the firm’s portfolio of growth-stage technology companies, finds that fast growers—or companies with 30 percent or more annual growth—share seven key characteristics associated with their growth.
Some of the key attributes Edison Partners found fast growers prove are: they spend significantly more dollars on sales and marketing; invest more in customer success; hire faster and retain employees longer; and record higher earnings before interest, tax, depreciation and amortization (EBITDA) losses.
“While focused investment in sales and marketing continues to be the primary catalyst for achieving 30-plus percent growth, here in our fifth edition of the Edison Partners Growth Index, customer success, pricing model sophistication and strong corporate cultures also emerged as key growth drivers,” said Alex Symos, vice president, Go-To-Market Center of Excellence at Edison Partners. “Fast growers also tend to take a more holistic and disciplined approach to acquisition and retention of their customers and, interestingly, employees alike. They spend with the intention to build a business model for scale, one that will bear exponential returns as the company grows.”
The Edison Partners Growth Index study was conducted in the first quarter of 2019 to identify the characteristics in common among companies with 2018 generally accepted accounting principles (GAAP) revenue growth rates of 30 percent or higher. The firm’s portfolio companies from fintech, health care IT and enterprise solutions sectors participated in the study. These are companies, ranging from $5 million to more than $50 million in revenue, that have moved beyond startup mode and are focused not only on top-line growth but also market and product expansion growth for scale and long-term customer value.