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Want to build a high-growth enterprise that will create a lot of value?

Arvin Babu
Monday, November 2, 2009
Arvin Babu
Good margins and good growth create great value. Sectors growing faster than GDP and attracting capital include traditional sectors such as infrastructure, real estate, manufacturing, and those that result from increased expectations and desires for higher quality services: think healthcare, financial services, education and public services.

Technology plays a crucial role in delivering services from these sectors in a cost effective manner to the majority of the population. For the past 44 years, Greylock has in turn served as a catalyst for businesses to deliver this crucial technology. Most of Greylock’s colleagues are former entrepreneurs or senior executives in leading technology companies who can relate first-hand to an entrepreneur’s journey.

What do VC’s look for in an opportunity?

Venture capitalists look for a business’s ability to scale non-linearly with cost: that is, revenue has the potential to grow much faster than expenses. Of course, the challenge is to know and recognize attributes that contribute to non-linear growth. As a result, Greylock focuses on evaluating a company’s barriers to entry—technology, market position, etc.—that would provide enough runway for scaling the business before competitors can materialize.

What is an example of an opportunity that has built-in barriers to entry?

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