We look at trailing revenue growth, forward-estimated growth, and — most importantly — the trajectory. A company growing 18% but accelerating toward 25% is categorically different from one growing 18% but decelerating toward 10%.

The threshold isn’t a hard rule; it’s a sorting mechanism. A company at 22% that uniquely expands a category can make the Innovation cut despite missing the 25% floor. But those exceptions are rare and deliberate — the discipline of the band is what keeps each strategy true to its mandate.

Every candidate is evaluated across the same framework: business model durability, competitive moat, unit economics, management quality, capital allocation history, customer concentration, gross margin trajectory, and total addressable market. We read the 10-Ks, listen to the earnings calls, build the models.

We’re looking for something specific: a business whose revenue growth is structurally driven — by category expansion, product-market fit, or platform dynamics — rather than cyclically pulled forward. Structural growth compounds. Cyclical growth reverts.

We model each candidate using multiple valuation frameworks — forward P/E, EV/Sales, EV/EBITDA, DCF, and sector-specific multiples where relevant — cross-referenced against the company’s historical range, its peer group, and our internal growth forecasts.

For Innovation SMA specifically, we accept that multiples will likely compress over time as the growth rate naturally decelerates. The thesis requires that revenue growth outpace multiple compression by enough to deliver our target return. When the math stops working, we exit — discipline over narrative.

Each strategy holds 20–30 positions, with position weights typically ranging from 2% to 7% based on conviction, risk profile, and correlation to existing holdings. The highest-conviction, highest-quality names earn the largest weights. Speculative or higher-risk names — when they make the portfolio at all — are sized smaller.

We don’t over-diversify. Owning 80 names dilutes the conviction that’s supposed to drive the return. But we also don’t over-concentrate — single-name risk is real, and we respect it. The 20–30 range is where concentration meaningfully differentiates without introducing reckless drawdown risk.

We track every holding against the original thesis — the revenue trajectory we underwrote, the margin expansion we expected, the moat assumptions we made. Quarterly earnings, competitive developments, and management changes are evaluated as evidence for or against.

Exits happen for three reasons: the thesis has played out and the risk-reward has flipped, new information materially breaks our underwriting, or a better opportunity exists in the universe. We don’t exit on price action alone, and we don’t marry positions. Holding period is an output of the thesis duration — typically multi-year, sometimes longer, occasionally shorter when circumstances require.