dropbox is a startup and investors invest in startups to generate outsized returns (with commensurate risk). outsized returns require outsized growth (specifically in free cash flows, but many proxy metrics are used to forecast free cash flows, aka future profits).
so the growth rate of a company is one of the biggest factors in its valuation, and higher valuation means more wealth generated for investors, including employee-shareholders.
in DCF (discounted cash flows, a fundamental valuation method), revenue growth rate is typically an estimated input, and the model is highly sensitive to it. the outputs of the model are the present value of future free cash flows, otherwise known as the valuation of the company.
higher growth rate => higher valuation, all other things being equal. investors are looking for the largest delta between initial valuation and final valuation they can get, and growth is one of the most reliable ways to achieve that.
companies that don't grow can generate nice returns for the current owners, but they don't generate outsized returns over time because as growth rate goes to zero, valuation becomes a constant, i.e., no delta in initial vs final valuation (all other things being equal).
so the growth rate of a company is one of the biggest factors in its valuation, and higher valuation means more wealth generated for investors, including employee-shareholders.
in DCF (discounted cash flows, a fundamental valuation method), revenue growth rate is typically an estimated input, and the model is highly sensitive to it. the outputs of the model are the present value of future free cash flows, otherwise known as the valuation of the company.
(see the growth rate in the DCF sensitivity chart on this example of DCF analysis on wikipedia: https://en.wikipedia.org/wiki/Discounted_cash_flow#/media/Fi... )
higher growth rate => higher valuation, all other things being equal. investors are looking for the largest delta between initial valuation and final valuation they can get, and growth is one of the most reliable ways to achieve that.
companies that don't grow can generate nice returns for the current owners, but they don't generate outsized returns over time because as growth rate goes to zero, valuation becomes a constant, i.e., no delta in initial vs final valuation (all other things being equal).