🚀 How to tell if a startup is really going to fly

A customer once asked us about investing in a tech startup.
Both companies were from a construction systems background — so there were clear synergies.
But the question was simple: “How do we know if this startup will actually fly?”

One quick check we used is something called the Rule of 40.

It’s a simple concept popularized by venture capital investors like Brad Feld and Bessemer Venture Partners.
You add up the Revenue Growth Rate + Profit Margin.
If the total is ≥ 40%, it’s considered healthy — a good balance between growth and profitability.

For example:

• Growing 50% but losing 10% → still okay (Rule of 40 = 40).
• Growing 20% with 25% margin → even better (Rule of 40 = 45).

It’s not a perfect rule, but it helps you see whether the company is scaling sustainably — or just burning cash to grow.

At ORNA, when we evaluate startups, we don’t just look at the potential synergy.
We also check if the numbers make sense.
 Contact us for more information 😊

#BusinessValuation #StartupFinance #RuleOf40 #Investment #ORNA