Overview
The corporate life-cycle characterizes a company by stages of growth, similar to how people progress through various stages of growth. The following have been identified by Damodaran as the stages of a companys life-cycle.
- Start-Up - initial phase of a company,
- Young Growth - the company has passed its initial hurdles in forming a successful company and has achieved a degree of growth.
- High Growth - the company has achieved high growth, a phase where the company's primary risk may be its ability to scale.
- Mature Stable - after a growth phase, the company plateaus and is able to generate a nice dividend for its owners, but has saturated it market.
- Decline - the final stage of the corporate lifecycle.
(see damodaran)
Implications
The stage in which a company finds itself can have implications for both the managers and investors in the company.