Escape velocity out of a small base: management describes the business compounding at a rate its own size cannot absorb
The model's full reasoning — Q1 2016 call → NOWe need to determine if management describes the company as being at a point where the rate of accumulation is the dominant fact, with both conditions: (1) management repeatedly frames real, already-banked activity as multiples of what it was, and (2) management treats the company as still small relative to that activity. Let's scan the transcript for such framing. Steve Schwarzman's opening remarks: "our AUM up over 11% to a record $344 billion" – that's 11% growth, not a multiple. He mentions "over $100 billion since the beginning of last year" – that's a cumulative amount, not a multiple. He talks about new businesses: "Tactical Opportunities, which is now over $15 billion, is in the final stages of raising its second vintage fund which is around $7 billion" – not a multiple. "Real Estate core+ is now $12 billion in only about two years" – that's a growth rate, but not a multiple of a small base? Actually "in only about two years" implies rapid growth, but not a specific multiple. "Our secondaries business, Strategic Partners, now manages nearly $16 billion with over $10 billion of products in the market just this year. That compares to a $2 billion flagship fund at the time we acquired them in 2013." That is a multiple: from $2 billion to $16 billion, that's 8x. But is that "real, already-banked activity"? Yes, AUM is real. And it's a multiple of the past. But is it the dominant fact? Also "Our Core Private Equity business has launched as a new concept with $700 million of commitments in the quarter, which we expect will reach $5 billion in the next month alone." That's a projection, not banked. "BAAM's individual investor solutions area, despite the redemption I mentioned, has grown to nearly $7 billion, more than double where we were at the start of last year" – that's a multiple: more than double. That's real banked AUM. So we have multiple instances of management using multiples: Strategic Partners 8x, BAAM individual solutions more than double. Also later Michael Chae says: "we've increased AUM 82% in the last 12 months" – that's not a multiple but a percentage. But he also says "with net inflows of over $625 million in the first quarter, more than offsetting the outflows" – not a multiple. Now condition (2): management treats the company as still small relative to what it's doing.
| Ticker | Company | Call | Date | Call grade |
|---|---|---|---|---|
| DASH | DoorDash, Inc. | Q3 2023 | 2023-11-01 | C+ |
| SYM | Symbotic Inc. | Q3 2022 | 2022-08-01 | B+ |
| SNOW | Snowflake Inc. | Q3 2022 | 2021-12-01 | A |
SNOW · Q3 2022 → YESThe question is about whether management describes the company as accumulating at a rate that's the dominant fact, using multiples or repeated doublings of its recent past, and treating the base as st...YES Frank Slootman repeatedly frames the current state in terms of multiples of the recent past: product revenue “growing 110% year-on-year” (more than doubling), EMEA “up 174%” and Asia-Pacific “219%”, BUILD Summit registrations “three times last year’s”, Snow Day “ 23,000 registrations”, Data Marketplace “grew 41%”, stable edges “more than 130% annual increase”, Powered By Snowflake partners “growing 137% quarter-on-quarter” and product revenue from them “173% year-on-year”.
DASH · Q3 2023 → YESThe question is whether management describes the company as accumulating at a rate that's the dominant fact, using multiples or repeated doublings of its recent past, and treating the base as still sm...YES The transcript shows management repeatedly framing the business in terms of multiples of its recent past: non-restaurant selection "going from 0 nearly 3 years ago to a multibillion-dollar business that's at scale now growing fast"; grocery GOV "has doubled year-on-year"; international growth "at multiples of what we see around the world"; and new verticals accelerating from the prior quarter.
SYM · Q3 2022 → YESThe question is about whether management describes the company as accumulating at a rate that's the dominant fact, using multiples or repeated doublings of its recent past, and treating the base as st...YES Management repeatedly frames the current state using multiples of recent past activity: backlog more than doubled (from $5.2B to $11.