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Coining the latest buzzword...

After a long executive career followed by entrepreneurial start-ups and exits in several industries, I have come into the investment business rather late but a combination of the experience I have had, the many mistakes I have made and my white hair, seems to be working. 

In many of the trades and industries I have covered, I have been responsible for coining buzzwords, which have become part of the industry vernacular, such as 'flowability' for vending machine ingredients, which previously tunnelled and 'GTS' (guaranteed to see), rather than 'OTS' (opportunity to see) in the media industry, where the medium concerned compels the customer to look at it (e.g. train and station ticket gate advertising, which only admits the customer once they have seen the gate open). 

It seems to me that the venture capital business also needs a new terminology.  Perhaps there is already is one?

When a company follows a deliberate strategy to reinvest all of its cash profits, and frequently equity, and even loan capital into growth and/or diversification.  Amazon would be a prime example.

I don't think there is a word describing the point at which a company could be profitable if it so wished.   I have always adopted the simple principles that Cash and ROCI (return on capital invested) describe the essential criteria for success.  I invite those who are more sophisticated in financial analysis and engineering either to tell me that there already is a buzzword, or to suggest a better one than the one I suggest, which is:

'NSP' (notional sustainable profit) 

Open to all - no prizes - or if you like it, let's use it!

Paul Daniels

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