Rates of Return
Rates of Return and Other Key Findings
When aggregated as a group, the eleven companies that finally made the study group in the Good to Great research (starting with 1,435 companies) achieved a 6.8x greater annual return than the venture capital industry or general market as a whole during the same time period.
When aggregated as a group, the eighteen companies that became the top half of the total thirty-six companies studied in the Built to Last research achieved a 15x greater annual return than the venture capital industry during the same time period.
Since all 100 companies selected in Harvard’s Inc. Fast 500 study were private companies, available rates of return on investor equity were not available. However, these interesting facts were discovered:
- Average sales growth over ten years was 281% per year.
- Only 4% of the 100 companies were venture capital backed.
- Only 3% of the 100 companies were angel backed.
- Only 10% of the 100 companies had a unique first product.
- The founders were not industry luminaries.
- All 100 companies were profitable in the first twelve months.
- Founders were still on board after ten years.
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