Growth requires capital, and capital requires compensation. Compensation, in turn, requires money on one's account, the source of which is profits, in order that control of the company doesn't pass from its founders to the financiers.

Question

Quizplus · Accepted Answer

This statement is true as companies need capital to grow, and this capital can come from profits or outside investors. However, founders would not want to give up control of their company to external financiers, and therefore, profits are necessary to compensate employees and retain control.

Growth Requires Capital, and Capital Requires Compensation