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Startup Archive
Vinod Khosla: “An investor is an employee you can’t fire”
Sam Altman asks Vinod how founders who want to build significant companies that will be around for decades should think about their investors.
Vinod believes that money is the smaller part of what you get from an investor:
“Advice and the right approach is the much more important part.”
He warns that investors who are happy with 3x their money may want to sell before you do. People who care about your vision won’t, and they’ll be much more tolerant when things inevitably go wrong.
To figure out if an investor will care about your vision, you have to talk to other founders—especially founders with a large vision who had hiccups along the way.
“When things go wrong along an ambitious path is when you can actually judge an investor. I think an investor is an employee you can’t fire, and that’s how you should think about it.”
He continues:
“Most investors are negative value add to a company that’s trying to be ambitious if they’re just trying to get to liquidity as soon as possible.”
When a founder comes to Vinod with an ambitious vision, he tries to help them think through the steps to get there and how to thoughtfully discover the risks on the path to that vision.
Sam Altman adds:
“The only recipe I’ve ever seen work for making really impactful companies is both a giant vision and a good step one, two, and three. You have to have both, and neither without the other will work.”
Video source: @ycombinator (2019)
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Vinod Khosla: “An investor is an employee you can’t fire”
Sam Altman asks Vinod how founders who want to build significant companies that will be around for decades should think about their investors.
Vinod believes that money is the smaller part of what you get from an investor:
“Advice and the right approach is the much more important part.”
He warns that investors who are happy with 3x their money may want to sell before you do. People who care about your vision won’t, and they’ll be much more tolerant when things inevitably go wrong.
To figure out if an investor will care about your vision, you have to talk to other founders—especially founders with a large vision who had hiccups along the way.
“When things go wrong along an ambitious path is when you can actually judge an investor. I think an investor is an employee you can’t fire, and that’s how you should think about it.”
He continues:
“Most investors are negative value add to a company that’s trying to be ambitious if they’re just trying to get to liquidity as soon as possible.”
When a founder comes to Vinod with an ambitious vision, he tries to help them think through the steps to get there and how to thoughtfully discover the risks on the path to that vision.
Sam Altman adds:
“The only recipe I’ve ever seen work for making really impactful companies is both a giant vision and a good step one, two, and three. You have to have both, and neither without the other will work.”
Video source: @ycombinator (2019)
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Offshore
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Clark Square Capital
RT @TheAppInvestor: $GRVY - Ragnarok New World, day 2 - still #1 in TW cf picture. Taiwan is a top 5 worldwide market for mobile revenue, and one where Ragnarok IP shines since 2022.
Game is cross-platform ,there's likely revenue on PC (was the case for Origin too). https://t.co/4Fpx9Xvu3h
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RT @TheAppInvestor: $GRVY - Ragnarok New World, day 2 - still #1 in TW cf picture. Taiwan is a top 5 worldwide market for mobile revenue, and one where Ragnarok IP shines since 2022.
Game is cross-platform ,there's likely revenue on PC (was the case for Origin too). https://t.co/4Fpx9Xvu3h
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Offshore
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Dimitry Nakhla | Babylon Capital®
RT @DimitryNakhla: A quality valuation analysis on $NOW 🧘🏽♂️
•NTM P/E Ratio: 52.28x
•3-Year Mean: 34.73x
•NTM FCF Yield: 3.61%
•10-Year Mean: 2.49%
As you can see, $NOW appears to be trading below fair value
Going forward, investors can expect to receive ~50% MORE in earnings per share & ~45% MORE in FCF per share🧠***
Before we get into valuation, let’s take a look at why $NOW is a quality business
BALANCE SHEET✅
•Cash & Equivalents: $5.41B
•Long-Term Debt: $1.49B
$NOW has a strong balance sheet, an A S&P Credit Rating & 210x FFO Interest Coverage Ratio
RETURN ON CAPITAL❌➡️✅
•2021: 4.3%
•2022: 5.2%
•2023: 8.1%
•2024: 11.8%
•LTM: 13.3%
RETURN ON EQUITY❌➡️✅
•2021: 7.0%
•2022: 7.4%
•2023: 27.3%
•2024: 16.5%
•LTM: 16.8%
$NOW return metrics are improving & trending in the right direction — a sign the business is becoming more efficient
REVENUE✅
•2020: $4.52B
•2025E: $13.24B
•CAGR: 23.97%
FREE CASH FLOW✅
•2020: $1.37B
•2025E: 26.79%
NORMALIZED EPS✅
•2020: $0.93
•2025E: $3.48
•CAGR: 30.20%
SHARE BUYBACKS❌
•2019 Shares Outstanding: 986.12M
•LTM Shares Outstanding: 1.05B
MARGINS🆗 / ✅
•LTM Gross Margins: 78.1%
•LTM Operating Margins: 14.4%
•LTM Net Income Margins: 13.7%
SGA is $NOW largest expense eating ~41% of LTM revenue, something to keep an eye on
***NOW TO VALUATION 🧠
As stated above, investors can expect to receive ~50% MORE in EPS & ~45% MORE in FCF per share
Using Benjamin Graham’s 2G rule of thumb, $NOW has to grow earnings at a 17.37% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2026 - 2028 EPS growth over the next few years to be slightly less (16.84%) than the (17.37%) required growth rate:
2025E: $3.48 (25% YoY) *FY Dec
2026E: $4.08 (17% YoY)
2027E: $4.89 (20% YoY)
2028E: $5.57 (14% YoY)
$NOW has an excellent track record of meeting analyst estimates ~2 years out, so let’s assume $NOW ends 2028 with $5.57 in EPS & see its CAGR potential assuming different multiples
34x P/E: $189💵 … ~12.2% CAGR
33x P/E: $184💵 … ~11.1% CAGR
32x P/E: $178💵 … ~9.9% CAGR
31x P/E: $173💵 … ~8.8% CAGR
30x P/E: $167💵 … ~7.6% CAGR
29x P/E: $161💵 … ~6.4% CAGR
As you can see, we’d have to assume a >34x multiple for $NOW to have attractive return potential
At 32x earnings $NOW has ok CAGR potential
Given its -40% drawdown, $NOW appears to be fairly valued today at $135💵
Yes, $NOW is the workflow operating system for large enterprises, automating & governing critical work across IT, HR, security, & customer service
Once embedded, it becomes deeply integrated into how the organization runs, creating high switching costs & powerful long-term expansion
With AI layered onto these workflows, $NOW can increasingly automate & execute work end-to-end
Yet, today’s price offers little margin of safety
I consider $NOW a strong consideration with a decent margin of safety at $110💵, where I can reasonably expect ~13% CAGR while assuming a more conservative 28x
___
𝐃𝐈𝐒𝐂𝐋𝐎𝐒𝐔𝐑𝐄‼️
𝐓𝐡𝐢𝐬 𝐜𝐨𝐧𝐭𝐞𝐧𝐭 𝐢𝐬 𝐩𝐫𝐨𝐯𝐢𝐝𝐞𝐝 𝐟𝐨𝐫 𝐢𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐚𝐧𝐝 𝐞𝐝𝐮𝐜𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐩𝐮𝐫𝐩𝐨𝐬𝐞𝐬 𝐨𝐧𝐥𝐲 𝐚𝐧𝐝 𝐝𝐨𝐞𝐬 𝐧𝐨𝐭 𝐜𝐨𝐧𝐬𝐭𝐢𝐭𝐮𝐭𝐞 𝐢𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐚𝐝𝐯𝐢𝐜𝐞, 𝐚𝐧 𝐨𝐟𝐟𝐞𝐫, 𝐨𝐫 𝐚 𝐬𝐨𝐥𝐢𝐜𝐢𝐭𝐚𝐭𝐢𝐨𝐧 𝐭𝐨 𝐛𝐮𝐲 𝐨𝐫 𝐬𝐞𝐥𝐥 𝐚𝐧𝐲 𝐬𝐞𝐜𝐮𝐫𝐢𝐭𝐲.
𝐁𝐚𝐛𝐲𝐥𝐨𝐧 𝐂𝐚𝐩𝐢𝐭𝐚𝐥® 𝐚𝐧𝐝 𝐢𝐭𝐬 𝐫𝐞𝐩𝐫𝐞𝐬𝐞𝐧𝐭𝐚𝐭𝐢𝐯𝐞𝐬 𝐦𝐚𝐲 𝐡𝐨𝐥𝐝 𝐩𝐨𝐬𝐢𝐭𝐢𝐨𝐧𝐬 𝐢𝐧 𝐭𝐡𝐞 𝐬𝐞𝐜𝐮𝐫𝐢𝐭𝐢𝐞𝐬 𝐝𝐢𝐬𝐜𝐮𝐬𝐬𝐞𝐝. 𝐀𝐧𝐲 𝐨𝐩𝐢𝐧𝐢𝐨𝐧𝐬 𝐞𝐱𝐩𝐫𝐞𝐬𝐬𝐞𝐝 𝐚𝐫𝐞 𝐚𝐬 𝐨𝐟 𝐭𝐡𝐞 𝐝𝐚𝐭𝐞 𝐨𝐟 𝐩𝐮𝐛𝐥𝐢𝐜𝐚𝐭𝐢𝐨𝐧 𝐚𝐧𝐝 𝐬𝐮𝐛𝐣𝐞𝐜𝐭 𝐭𝐨 𝐜𝐡𝐚𝐧𝐠𝐞 𝐰𝐢𝐭𝐡𝐨𝐮𝐭 𝐧𝐨𝐭𝐢𝐜𝐞.
𝐈𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧 𝐡𝐚𝐬 𝐛𝐞𝐞𝐧 𝐨𝐛𝐭𝐚𝐢𝐧𝐞𝐝 𝐟𝐫𝐨𝐦 𝐬𝐨𝐮𝐫𝐜𝐞𝐬 𝐛𝐞𝐥𝐢𝐞𝐯𝐞𝐝 𝐭𝐨 𝐛𝐞 𝐫𝐞𝐥𝐢𝐚𝐛𝐥𝐞 𝐛𝐮𝐭 𝐢𝐬 𝐧𝐨𝐭 𝐠𝐮𝐚𝐫𝐚𝐧𝐭𝐞𝐞𝐝 𝐚𝐬 𝐭𝐨 𝐚𝐜𝐜𝐮𝐫𝐚𝐜𝐲 𝐨𝐫 𝐜𝐨𝐦𝐩𝐥𝐞𝐭𝐞𝐧𝐞𝐬𝐬. 𝐏𝐚𝐬𝐭 𝐩𝐞𝐫𝐟𝐨�[...]
RT @DimitryNakhla: A quality valuation analysis on $NOW 🧘🏽♂️
•NTM P/E Ratio: 52.28x
•3-Year Mean: 34.73x
•NTM FCF Yield: 3.61%
•10-Year Mean: 2.49%
As you can see, $NOW appears to be trading below fair value
Going forward, investors can expect to receive ~50% MORE in earnings per share & ~45% MORE in FCF per share🧠***
Before we get into valuation, let’s take a look at why $NOW is a quality business
BALANCE SHEET✅
•Cash & Equivalents: $5.41B
•Long-Term Debt: $1.49B
$NOW has a strong balance sheet, an A S&P Credit Rating & 210x FFO Interest Coverage Ratio
RETURN ON CAPITAL❌➡️✅
•2021: 4.3%
•2022: 5.2%
•2023: 8.1%
•2024: 11.8%
•LTM: 13.3%
RETURN ON EQUITY❌➡️✅
•2021: 7.0%
•2022: 7.4%
•2023: 27.3%
•2024: 16.5%
•LTM: 16.8%
$NOW return metrics are improving & trending in the right direction — a sign the business is becoming more efficient
REVENUE✅
•2020: $4.52B
•2025E: $13.24B
•CAGR: 23.97%
FREE CASH FLOW✅
•2020: $1.37B
•2025E: 26.79%
NORMALIZED EPS✅
•2020: $0.93
•2025E: $3.48
•CAGR: 30.20%
SHARE BUYBACKS❌
•2019 Shares Outstanding: 986.12M
•LTM Shares Outstanding: 1.05B
MARGINS🆗 / ✅
•LTM Gross Margins: 78.1%
•LTM Operating Margins: 14.4%
•LTM Net Income Margins: 13.7%
SGA is $NOW largest expense eating ~41% of LTM revenue, something to keep an eye on
***NOW TO VALUATION 🧠
As stated above, investors can expect to receive ~50% MORE in EPS & ~45% MORE in FCF per share
Using Benjamin Graham’s 2G rule of thumb, $NOW has to grow earnings at a 17.37% CAGR over the next several years to justify its valuation
Today, analysts anticipate 2026 - 2028 EPS growth over the next few years to be slightly less (16.84%) than the (17.37%) required growth rate:
2025E: $3.48 (25% YoY) *FY Dec
2026E: $4.08 (17% YoY)
2027E: $4.89 (20% YoY)
2028E: $5.57 (14% YoY)
$NOW has an excellent track record of meeting analyst estimates ~2 years out, so let’s assume $NOW ends 2028 with $5.57 in EPS & see its CAGR potential assuming different multiples
34x P/E: $189💵 … ~12.2% CAGR
33x P/E: $184💵 … ~11.1% CAGR
32x P/E: $178💵 … ~9.9% CAGR
31x P/E: $173💵 … ~8.8% CAGR
30x P/E: $167💵 … ~7.6% CAGR
29x P/E: $161💵 … ~6.4% CAGR
As you can see, we’d have to assume a >34x multiple for $NOW to have attractive return potential
At 32x earnings $NOW has ok CAGR potential
Given its -40% drawdown, $NOW appears to be fairly valued today at $135💵
Yes, $NOW is the workflow operating system for large enterprises, automating & governing critical work across IT, HR, security, & customer service
Once embedded, it becomes deeply integrated into how the organization runs, creating high switching costs & powerful long-term expansion
With AI layered onto these workflows, $NOW can increasingly automate & execute work end-to-end
Yet, today’s price offers little margin of safety
I consider $NOW a strong consideration with a decent margin of safety at $110💵, where I can reasonably expect ~13% CAGR while assuming a more conservative 28x
___
𝐃𝐈𝐒𝐂𝐋𝐎𝐒𝐔𝐑𝐄‼️
𝐓𝐡𝐢𝐬 𝐜𝐨𝐧𝐭𝐞𝐧𝐭 𝐢𝐬 𝐩𝐫𝐨𝐯𝐢𝐝𝐞𝐝 𝐟𝐨𝐫 𝐢𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐚𝐧𝐝 𝐞𝐝𝐮𝐜𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐩𝐮𝐫𝐩𝐨𝐬𝐞𝐬 𝐨𝐧𝐥𝐲 𝐚𝐧𝐝 𝐝𝐨𝐞𝐬 𝐧𝐨𝐭 𝐜𝐨𝐧𝐬𝐭𝐢𝐭𝐮𝐭𝐞 𝐢𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐚𝐝𝐯𝐢𝐜𝐞, 𝐚𝐧 𝐨𝐟𝐟𝐞𝐫, 𝐨𝐫 𝐚 𝐬𝐨𝐥𝐢𝐜𝐢𝐭𝐚𝐭𝐢𝐨𝐧 𝐭𝐨 𝐛𝐮𝐲 𝐨𝐫 𝐬𝐞𝐥𝐥 𝐚𝐧𝐲 𝐬𝐞𝐜𝐮𝐫𝐢𝐭𝐲.
𝐁𝐚𝐛𝐲𝐥𝐨𝐧 𝐂𝐚𝐩𝐢𝐭𝐚𝐥® 𝐚𝐧𝐝 𝐢𝐭𝐬 𝐫𝐞𝐩𝐫𝐞𝐬𝐞𝐧𝐭𝐚𝐭𝐢𝐯𝐞𝐬 𝐦𝐚𝐲 𝐡𝐨𝐥𝐝 𝐩𝐨𝐬𝐢𝐭𝐢𝐨𝐧𝐬 𝐢𝐧 𝐭𝐡𝐞 𝐬𝐞𝐜𝐮𝐫𝐢𝐭𝐢𝐞𝐬 𝐝𝐢𝐬𝐜𝐮𝐬𝐬𝐞𝐝. 𝐀𝐧𝐲 𝐨𝐩𝐢𝐧𝐢𝐨𝐧𝐬 𝐞𝐱𝐩𝐫𝐞𝐬𝐬𝐞𝐝 𝐚𝐫𝐞 𝐚𝐬 𝐨𝐟 𝐭𝐡𝐞 𝐝𝐚𝐭𝐞 𝐨𝐟 𝐩𝐮𝐛𝐥𝐢𝐜𝐚𝐭𝐢𝐨𝐧 𝐚𝐧𝐝 𝐬𝐮𝐛𝐣𝐞𝐜𝐭 𝐭𝐨 𝐜𝐡𝐚𝐧𝐠𝐞 𝐰𝐢𝐭𝐡𝐨𝐮𝐭 𝐧𝐨𝐭𝐢𝐜𝐞.
𝐈𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧 𝐡𝐚𝐬 𝐛𝐞𝐞𝐧 𝐨𝐛𝐭𝐚𝐢𝐧𝐞𝐝 𝐟𝐫𝐨𝐦 𝐬𝐨𝐮𝐫𝐜𝐞𝐬 𝐛𝐞𝐥𝐢𝐞𝐯𝐞𝐝 𝐭𝐨 𝐛𝐞 𝐫𝐞𝐥𝐢𝐚𝐛𝐥𝐞 𝐛𝐮𝐭 𝐢𝐬 𝐧𝐨𝐭 𝐠𝐮𝐚𝐫𝐚𝐧𝐭𝐞𝐞𝐝 𝐚𝐬 𝐭𝐨 𝐚𝐜𝐜𝐮𝐫𝐚𝐜𝐲 𝐨𝐫 𝐜𝐨𝐦𝐩𝐥𝐞𝐭𝐞𝐧𝐞𝐬𝐬. 𝐏𝐚𝐬𝐭 𝐩𝐞𝐫𝐟𝐨�[...]
Offshore
Dimitry Nakhla | Babylon Capital® RT @DimitryNakhla: A quality valuation analysis on $NOW 🧘🏽♂️ •NTM P/E Ratio: 52.28x •3-Year Mean: 34.73x •NTM FCF Yield: 3.61% •10-Year Mean: 2.49% As you can see, $NOW appears to be trading below fair value Going forward…
�𝐦𝐚𝐧𝐜𝐞 𝐝𝐨𝐞𝐬 𝐧𝐨𝐭 𝐠𝐮𝐚𝐫𝐚𝐧𝐭𝐞𝐞 𝐟𝐮𝐭𝐮𝐫𝐞 𝐫𝐞𝐬𝐮𝐥𝐭𝐬.
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Dimitry Nakhla | Babylon Capital®
RT @DimitryNakhla: 1 year later, $NOW is finally trading at a level worth visiting ($700 adjusted for the 5:1 stock split is a $140 share price)
Tomorrow I’ll share a quality valuation analysis on $NOW 📊 https://t.co/wlDFNE3PR4
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RT @DimitryNakhla: 1 year later, $NOW is finally trading at a level worth visiting ($700 adjusted for the 5:1 stock split is a $140 share price)
Tomorrow I’ll share a quality valuation analysis on $NOW 📊 https://t.co/wlDFNE3PR4
@FazalBalaj $NOW would have to drop to ~$700 for me to *start* to get interested tweet
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Fiscal.ai
The Fiscal AI team just hit 50 people! 🚀
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The Fiscal AI team just hit 50 people! 🚀
Frankly, when we first started hacking away on @fiscal_ai we didn't have some grand vision...
We simply knew there were key problems in how investors were getting and being sold financial data to make informed decisions.
We have a lot to do... LFG!!! https://t.co/Wx01E0TfGW tweet
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Dimitry Nakhla | Babylon Capital®
$FICO https://t.co/K0HUXjLNr5
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$FICO https://t.co/K0HUXjLNr5
Several key takeaways from FICO’s latest quarterly call (Q4 2025 transcripts for reference)
$FICO remains one of the most quietly dominant businesses in the market & arguably among the best examples of consistent execution & pricing power 🧵 https://t.co/R8Vqfl7REn tweet