Last bite of the Apple

  1. Mom & Pop shops — These are regular everyday businesses that have very limited growth potential. The operations are usually limited to the capacity of the shop owner. For example a clothing shop or a small Dollar store. These businesses can be compared to the Hyundai, the Datsun, and the Renault of the business world.
  2. SME businesses — These are businesses that don’t deal with any innovative products, the products are already well known and their growth is usually limited to the geographics that they are serving. For example. Copper plating business. Water bottle manufacturing. Due to heavy competition, these businesses have a medium growth scale. Let’s call these the Audi A6, The BMW 5 Series, Mercedes E Class.
  3. Established Players — These are the businesses that have huge operations in the existing products. They have their edge due to the first movers’ advantage. They already have peaked their performances and are making marginal improvements for growth. For example. Banks, Big conglomerate businesses. Let’s call these the Lambos, Ferraris.
  4. Startups — These are the Businesses types that have the highest upside. These businesses operate at the highest level of autonomy and scale the fastest. These businesses have the best talent pool, best resources, and everything at their disposal. These businesses leverage technology to create the next breakthrough in innovation and growth. These are the top of the top. This is the Crème de la crème. For Examples, Airbnb, Zillow, Uber, Razorpay, and 100s of others. Let’s call these the Pagani, the Bugatti, and The Koenigsegg of the business world.
  1. Retail investor-
    Least risk. Whenever a start-up comes to IPOs or Public markets, the hyper-growth of 100x 1000x is already exhausted. This is where you can expect to get 20% or 50% growth safely. The start-up has already solved the product-market fit, it has a clear growth path. This is when the start-up is at its safest hence the low returns. Retail is usually the tail end of the spectrum.
  2. Grey Market investor –
    These are the investors that have slightly more advantage over the retail, they get to buy premiums of the stock of the company before it goes IPO. I don’t this is to be a meaningful investor class but in the interest of educating the reader, I mentioned it.
  3. Venture capital-
    Venture capital is the sweet spot in my opinion. At this stage, the start-ups still have huge upside and are a long way from IPO. The venture capital investor stage tends to be most lucrative since the start-ups have freshly solved the Product-market fit and are ready for the next round of funding which will later make it IPO-ready.
  4. Angel investor —
    Angels are the ones who are at the very nascent stage of a startup. Where the start-up is struggling to understand what to scale and where to scale. Angels help start not just with capital but with connections, insights, and other valuable resources that the start-up needs to figure out what they need to scale. This is the highest risk situation but also the highest reward since you get to invest in a start-up at a very early stage.

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Abhishek Sonawane

Abhishek Sonawane

i like to write about self improvement, tech, Crypto and life.

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