Matrix for portfolio management and asset optimization from an investors perspective by Thomas Grota T-Venture at Deutsche Telekom. I published a guideline for business strategies of VC funded companies in the current market environments based on financial performance and company valuations outlined in a decision matrix. https://medium.com/@thomasgr/the-hot-crazy-matrix-how-winter-times-look-like-from-an-investors-perspective-335c29cfbbd4

1. The Hot-Crazy-Matrix
By Thomas Grota
@thomasgr

2. Valuation $30bn
$10bn
$5bn
The Hot-Crazy-Matrix
$100mn
by Thomas Grota (@thomasgr)
Valuation of the company
shows the Crazy level of an
investment. As higher it gets
as more Crazy it will be.

3. Valuation
Revenue vs. Ebit Ratio
$30bn
$10bn
$5bn
The Hot-Crazy-Matrix
$1/$+1$1/$-1$1/$ -10
$100mn
by Thomas Grota (@thomasgr)
Revenue vs. Ebit Ratio gives a
hint on profitability. As more
profitable in this ratio a
company is, as hotter it will
be. So it increases its
the Hotness Level.

4. Valuation
Revenue vs. Ebit Ratio
$30bn
$10bn
$5bn
The Hot-Crazy-Matrix
$1/$+1$1/$-1$1/$ -10
$100mn
by Thomas Grota (@thomasgr)
High burnrate, focused on growth, low valuation = seams OK
Medium Hotness gets medium Valuation = it’s OK
Highly profitable is recognized by Crazy valuation = very OK

5. Valuation
Revenue vs. Ebit Ratio
$30bn
$10bn
$5bn
The Hot-Crazy-Matrix
$1/$+1$1/$-1$1/$ -10
$100mn
IPO Candidates
or Super Merger
by Thomas Grota (@thomasgr)
The Hot-Crazy
Matrix can only be
valid for late stage
companies – early
stage companies
can neither be
profitable nor have
a mature
product/market fit.

6. Valuation
Revenue vs. Ebit Ratio
$30bn
$10bn
$5bn
The Hot-Crazy-Matrix
$1/$+1$1/$-1$1/$ -10
$100mn
IPO Candidates
or Super Merger
Too expensive to buy.
Corporations take over your
markets and revenues.
Cut costs or pivot.
by Thomas Grota (@thomasgr)
Companies who are
profitable in a later
stage deserve a
high valuation.
Those will have a
good chance on an
IPO or get a merger
offer from a
competitor/compli-
mentary company

7. Valuation
Revenue vs. Ebit Ratio
$30bn
$10bn
$5bn
The Hot-Crazy-Matrix
$1/$+1$1/$-1$1/$ -10
$100mn
IPO Candidates
or Super Merger
No IPO,
No Buyer,
No pressure,
Hope for better times
Too expensive to buy.
Corporations take over your
markets and revenues.
Cut costs or pivot.
by Thomas Grota (@thomasgr)
There are
companies stuck in
the middle – to
good to be
acquired, but not
good enough for
IPO. So sit and wait
until a new
opportunity raises.

8. Valuation
Revenue vs. Ebit Ratio
$30bn
$10bn
$5bn
The Hot-Crazy-Matrix
$1/$+1$1/$-1$1/$ -10
$100mn
Acquisition Targets for
IPO Candidates or
public companies
IPO Candidates
or Super Merger
No IPO,
No Buyer,
No pressure,
Hope for better times
Too expensive to buy.
Corporations take over your
markets and revenues.
Cut costs or pivot.
by Thomas Grota (@thomasgr)
At a decent but fair
valuation a
company with
appealing financials
will be a good
target for a take
over at an
attractive price. So
why not following
that path?

9. Valuation
Revenue vs. Ebit Ratio
$30bn
$10bn
$5bn
The Hot-Crazy-Matrix
$1/$+1$1/$-1$1/$ -10
$100mn
Acquisition Targets for
IPO Candidates or
public companies
IPO Candidates
or Super Merger
No IPO,
No Buyer,
No pressure,
Hope for better times
Keep Innovate.
Category
leaders will
copy your
product
Too expensive to buy.
Corporations take over your
markets and revenues.
Cut costs or pivot.
by Thomas Grota (@thomasgr)
Those companies
stuck in the middle
but not in a good
way. They can not
afford to wait. The
did not make it in
their category or
market. So be
active to find your
suite spot.

10. Valuation
Revenue vs. Ebit Ratio
$30bn
$10bn
$5bn
The Hot-Crazy-Matrix
$1/$+1$1/$-1$1/$ -10
$100mn
Acquisition Targets for
IPO Candidates or
public companies
IPO Candidates
or Super Merger
No IPO,
No Buyer,
No pressure,
Hope for better times
Use remaining Cash
for M&A process
Keep Innovate.
Category
leaders will
copy your
product
Too expensive to buy.
Corporations take over your
markets and revenues.
Cut costs or pivot.
by Thomas Grota (@thomasgr)
Let’s face it: you
can’t make it to a
better place even
over time. So look
out for a good
value for money
and maybe start
over again in the
near future.

11. Valuation
Revenue vs. Ebit Ratio
$30bn
$10bn
$5bn
The Hot-Crazy-Matrix
$1/$+1$1/$-1$1/$ -10
$100mn
Acquisition Targets for
IPO Candidates or
public companies
IPO Candidates
or Super Merger
No IPO,
No Buyer,
No pressure,
Hope for better times
Use remaining Cash
for M&A process
Keep Innovate.
Category
leaders will
copy your
product
Too big to fail.
So hope your investors will keep
you alive as long as needed.
Pray for new IPO window.
by Thomas Grota (@thomasgr)
Those are the most
unicorns as of
today. Failing for
their investors will
come at a hefty
price tag. But new
investors are not
eager to join. So
hope for the best.

12. Valuation
Revenue vs. Ebit Ratio
$30bn
$10bn
$5bn
The Hot-Crazy-Matrix
$1/$+1$1/$-1$1/$ -10
$100mn
Acquisition Targets for
IPO Candidates or
public companies
IPO Candidates
or Super Merger
No IPO,
No Buyer,
No pressure,
Hope for better times
Use remaining Cash
for M&A process
Keep Innovate.
Category
leaders will
copy your
product
Too big to fail.
So hope your investors will keep
you alive as long as needed.
Pray for new IPO window.
by Thomas Grota (@thomasgr)
Kill product
acquihire
You made a nice
product or feature.
People and
investors love you.
But it is not enough
to become big. Join
a ship with like
minded fellows and
make the world a
better place.

13. Valuation
Revenue vs. Ebit Ratio
$30bn
$10bn
$5bn
The Hot-Crazy-Matrix
$1/$+1$1/$-1$1/$ -10
$100mn
Acquisition Targets for
IPO Candidates or
public companies
IPO Candidates
or Super Merger
No IPO,
No Buyer,
No pressure,
Hope for better times
Use remaining Cash
for M&A process
Keep Innovate.
Category
leaders will
copy your
product
Too expensive to buy.
Corporations take over your
markets and revenues.
Cut costs or pivot.
Too big to fail.
So hope your investors will keep
you alive as long as needed.
Pray for new IPO window.
by Thomas Grota (@thomasgr)
Kill product
acquihire
The death valley of
smaller unicorns
and investors trap.
Make the hard
decisions and try to
get out of this place
–
RIGHT NOW!

14. Valuation
Revenue vs. Ebit Ratio
$30bn
$10bn
$5bn
The Hot-Crazy-Matrix
$1/$+1$1/$-1$1/$ -10
$100mn
Acquisition Targets for
IPO Candidates or
public companies
IPO Candidates
or Super Merger
No IPO,
No Buyer,
No pressure,
Hope for better times
Use remaining Cash
for M&A process
Keep Innovate.
Category
leaders will
copy your
product
Too expensive to buy.
Corporations take over your
markets and revenues.
Cut costs or pivot.
Too big to fail.
So hope your investors will keep
you alive as long as needed.
Pray for new IPO window.
by Thomas Grota (@thomasgr)
Increase efficiency.
Cut costs to
become M&A
target.
Kill product
acquihire
You are almost
there. A bit too
expensive for the
market based on
the numbers you
provide. Shape the
fat, increase
productivity. It’s not
far to the end zone.

15. Valuation
Revenue vs. Ebit Ratio
$30bn
$10bn
$5bn
The Hot-Crazy-Matrix
$1/$+1$1/$-1$1/$ -10
$100mn
Acquisition Targets for
IPO Candidates or
public companies
IPO Candidates
or Super Merger
No IPO,
No Buyer,
No pressure,
Hope for better times
Use remaining Cash
for M&A process
Keep Innovate.
Category
leaders will
copy your
product
Too expensive to buy.
Corporations take over your
markets and revenues.
Cut costs or pivot.
Too big to fail.
So hope your investors will keep
you alive as long as needed.
Pray for new IPO window.
by Thomas Grota (@thomasgr)
Increase efficiency.
Cut costs to
become M&A
target.
Kill product
acquihire