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In investing terminology, what is meant by pre-revenue and post revenue stages?

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Question added by Deleted user
Date Posted: 2016/01/27
Duncan Robertson
by Duncan Robertson , Strategy Consultant , Duncan Robertson Consultancy

Starting up a business takes time.  You have to set everything up, make plans, perhaps hire people and develop the product.  This is the pre-revenue phase.

At some point, you'll starting making sales: this is the beginning of the post revenue phase.  At this point the business still requires cash to fund its operations, and it may be some time before the points of positive cashflow and profitability are reached.  And of course in many cases they are never reached.  The transition between phases is theoretically marked by the first sale to a genuine customer, although in some cases there is a period of test sales.

In internet businesses in particular the pre-revenue phase can be very long (several years) as the site/app builds a user base before attempted to monetise it.   The loss-making post-revenue stage can be very long indeed.

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