Mid-sized companies are the silent protagonists of the Brazilian economy. They form the backbone of production chains, sustain thousands of jobs, and are increasingly at the center of attention for investors and boards. But what sets apart those that manage to double in size within five years from those that remain stagnant?
A study by Fundação Dom Cabral (FDC), conducted in 2022 with over 1,100 companies, sought to answer that question. The result was the identification of a high-growth model — replicable, consistent, and full of valuable lessons for entrepreneurs, advisors, and executives.
The FDC High-Growth Model
According to the research, the mid-sized companies that grew the most share four interconnected elements:
Aggressive profit reinvestment – retaining a large portion of earnings within the business to finance innovation, processes, and people.
Business structuring and professionalization – mature governance, effective advisory boards, solid financial management, and qualified teams.
Expansion and high-value strategies – disciplined diversification, focus on high-margin products, and customized offerings.
Revenue growth with strong profitability – the result of a reinforcing cycle that drives scale and opens new opportunities for expansion.
This model is not based solely on sales growth, but on the ability to grow with quality, discipline, and long-term vision.
Six Key Growth Factors
1. Governance and Advisory Boards
Companies that establish structured boards expand their strategic vision, avoid “management myopia,” and connect to value networks. This explains why businesses with mature governance tend to outperform others.
2. Profit Reinvestment
While low-growth companies reinvest about 23–30% of their profits, high-growth ones reach up to 50%. This self-financing supports innovation, digitalization, and expansion without excessive reliance on expensive credit.
3. Innovation, Digitalization, and Processes
Technologies such as AI, IoT, and big data transform processes, reduce costs, and increase scalability. Innovation is not an accessory — it’s a foundation of competitiveness.
4. People and Commercial Management
Training and developing internal talent is essential. Qualified teams accelerate adaptation and innovation. Moreover, top-performing companies invest heavily in commercial management — strengthening planning, market intelligence, and sales performance.
5. Market Strategies
Customization of products and services ensures differentiation; focusing on high-margin products sustains financial health; disciplined diversification across markets, geographies, and channels reduces risks and opens new opportunities.
6. Mergers and Acquisitions (M&A)
Few strategies impact growth as much as M&A. They accelerate market access, expand competencies, and rapidly increase scale.
Challenges and Limitations
Despite their success, the study points out recurring obstacles: high capital costs, regulatory complexity, and difficulty attracting talent. It also warns against the “growth dogma” — expanding without profitability compromises sustainability. The key lies in growing with healthy margins and focus on value creation.
Conclusions and Recommendations
The study’s message is clear: accelerated growth is not improvisation, but the result of disciplined strategy.
- Structured governance and advisory boards broaden vision and connect companies to new resources.
- Profit reinvestment demonstrates confidence in the business and reduces dependence on external capital.
- Innovation, digitalization, and talent sustain efficiency and differentiation.
- Market strategies and mergers accelerate expansion without sacrificing profitability.
In a competitive and volatile market, mid-sized companies that apply this model achieve not only growth, but also longevity, competitiveness, and relevance.