Thinly sliced salami!

By John Tough | January 31, 2021

The best of breed don’t grow on thinly sliced salami!
Eugene Kleiner

Eugene Kleiner made this statement in reference to negotiating fair deals and ensuring companies are adequately capitalized without onerous terms. Today there are standard terms in VC: invest $ for preferred equity. But 4-5 decades ago that was an innovative structure compared to debt or other more restrictive structures.

But I look at this quote as having different meaning today: the best companies don’t just happen. They need a whole lot of substance and quality to grow upon. The best companies are robust throughout their entire organization:

Leadership
Recruitment and talent management
Diversity and inclusion
Customer engagement
Product development
Operational process
Culture

And of course, there is a financial capitalization and balance sheet angle that is very relevant today as well. That capital does not create the “substance and quality” investment mindset, but can strengthen the organization as it grows.

Excellence doesn’t just happen. It takes intentional, hearty investment. The best businesses are not growing on thinly sliced salami.