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What is a scalable business for angel investors?



When a business model has the potential to generate growth in revenues significantly faster than its cost base, the business model is said to be scalable. As growing revenues increase the operating margin, scalable business models have the potential for earning very high profits. The key to scalable business models is to have small Costs Of Goods Sold (COGS), and a mechanism to drive demand and revenues.



Angel investors are generally most interested in businesses that are scalable.